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REI - Ring Energy Inc News Story

$3.93 -0.0  -0.3%

Last Trade - 19/10/21

Sector
Energy
Size
Small Cap
Market Cap £285.2m
Enterprise Value £502.9m
Revenue £109.3m
Position in Universe 4031st / 7245

Ring Energy Announces First Quarter 2021 Results

Mon 10th May, 2021 10:47pm
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THE WOODLANDS, Texas, May 10, 2021 (GLOBE NEWSWIRE) -- Ring Energy, Inc. (NYSE
American: REI) (“Ring” or the “Company”) today reported operational
and financial results for the first quarter 2021 and reaffirmed full year 2021
guidance.

Highlights and Recent Key Items
* Sold 7,960 barrels of oil equivalent per day (“Boe/d”), or 716,422
barrels of oil equivalent (“Boe”) (85% oil), in the first quarter of 2021,
with production significantly impacted by the severe winter storm in February
and temporary downtime associated with well completions activity and the
conversion of electrical submersible pumps to rod pumps (“CTR”);
* Reported a net loss of $19.1 million, or $0.19 per share, and Adjusted Net
Income(1) of $7.0 million, or $0.07 per share, in the first quarter of 2021;
* Generated Adjusted EBITDA(1) of $19.0 million for the first quarter of 2021;
* Produced Free Cash Flow(1) of $2.9 million in the first quarter of 2021,
marking the sixth consecutive quarter of Free Cash Flow generation;
* Further reduced debt on the Company’s revolving credit facility by $7.5
million during the first quarter 2021 by utilizing a portion of Free Cash
Flow;   
* Performed nine CTRs in this year’s first quarter (seven in Northwest Shelf
(“NWS”) and two in Central Basin Platform (“CBP”)) reducing future
overall operating costs and diminishing costly workovers;
* Completed and placed on production all four wells of the Company’s NWS
Phase I drilling program during the first quarter, with all wells completed on
schedule and budget, and collective production results to date meeting or
exceeding expectations;
* Successfully finished drilling operations on the NWS Phase II drilling
program, releasing the rig April 29, 2021, with all three wells expected to be
completed on schedule and within budget, and online by the end of May 2021;
* During the first quarter, the Company closed on the sale and exchange of
certain oil and gas interests in Andrews County, Texas, with Vin Fisher
Operating, Inc. (“VFOC”). The effective date of the transaction was
January 1, 2021, with Ring receiving a net value consideration in cash of $2.0
million; and
* Reaffirmed full year 2021 guidance.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer,
commented, “Despite the significant impact of the severe winter storm across
Texas during February, we were pleased with our overall results for the
quarter. We were able to generate free cash flow for the sixth consecutive
quarter and continued to pay down debt while pursuing our targeted development
program that is showing strong results. Our performance in the period was a
direct result of the continued dedication of Ring’s employees, and I want to
thank all of them for their hard work and tireless efforts as they acted
quickly and decisively to return our operations back to substantially
pre-storm production levels. This was evidenced by our average net sales of
9,094 Boepd during March 2021, which does not include approximately 200 Boepd
associated with the full restoration of certain third-party gas processing
facilities damaged during the storm.

“Partially offsetting the impact of the winter storm on our first quarter
sales volumes was the completion of the four wells included in our NWS Phase I
drilling program. We are also pleased with our NWS Phase II drilling program
as our drilling operations are finished and all wells are expected to be
online by the end of May, including the first well that was placed on
production on April 30, 2021.     

“We believe our focus on operational excellence to steady production levels
and control costs, as well as ensuring capital discipline through targeted
investment in our highest risk-adjusted return opportunities, will drive
increased profitability and sustainability for the remainder of 2021 and
beyond. We appreciate the ongoing support of our shareholders as we continue
to generate incremental free cash flow that we will use to further enhance our
financial position through additional pay down of debt. We are encouraged by
the M&A opportunities we are seeing in the marketplace and are actively
evaluating them to potentially grow the business through targeted, accretive
asset acquisitions. We have engaged advisors to assist in evaluating and
financing these opportunities.”

For the first quarter of 2021, the Company reported a net loss of $19.1
million, or $0.19 per share, which included before tax adjustments of $25.7
million for a non-cash unrealized commodity derivative loss and $0.4 million
for share-based compensation. Excluding the estimated after-tax impact of
these adjustments, the Company’s Adjusted Net Income was $7.0 million, or
$0.07 per share. In the fourth quarter of 2020, the Company reported a net
loss of $160.3 million, or $1.83 per share, which included before tax
adjustments of $129.6 million for a non-cash ceiling test impairment primarily
due to lower oil pricing, a $15.2 million non-cash unrealized commodity
derivative loss, and $2.8 million for share-based compensation. Excluding the
estimated after-tax impact of these adjustments and adding back the full
valuation against its deferred tax assets of $50.6 million, the Company’s
Adjusted Net Income was $6.5 million, or $0.07 per share. In the first quarter
of 2020, Ring reported net income of $43.8 million, or $0.64 per share, which
included a $47.1 million non-cash unrealized commodity derivative gain and
$0.7 million for share-based compensation. Excluding the estimated after-tax
impact of these adjustments, Adjusted Net Income in the first quarter of 2020
was $7.7 million, or $0.11 per share.

Adjusted EBITDA declined to $19.0 million for the first quarter of 2021 from
$24.5 million in the fourth quarter of 2020 and $28.2 million in the first
quarter of 2020. The decline in Adjusted EBITDA compared to both prior periods
was primarily due to lower sales volumes that were partially offset by higher
commodity prices.

Free Cash Flow for the first quarter of 2021 totaled $2.9 million compared
with $12.7 million in the fourth quarter of 2020 and $8.0 million for the
first quarter of 2020.  

Adjusted Net Income, Adjusted EBITDA and Free Cash Flow are non-GAAP financial
measures, which are described in more detail and reconciled to the most
comparable GAAP measures, in the tables shown later in this release under
“Non-GAAP Information.”

Sales Volumes, Prices and Revenues: Sales volumes for the first quarter of
2021 were 7,960 Boe/d (85% oil), or 716,422 Boe, compared to 9,307 Boe/d (86%
oil), or 856,271 Boe, for the fourth quarter of 2020 and 10,804 Boe/d (87%
oil) in the first quarter of 2020. First quarter 2021 sales volumes were
comprised of 610,121 barrels (“Bbls”) of oil and 637,808 thousand cubic
feet (“Mcf”) of natural gas.

Sales volumes for the first quarter of 2021 declined from the fourth quarter
of 2020 primarily due to the negative impact of the severe winter storm in
February that resulted in the shut-in and deferral of more than 60% of
Ring’s production for the majority of the storm with restoration of most of
the production taking more than two weeks to complete. Temporary downtime
associated with production shut-in of offset wells during the completion
operations of the four NWS Phase I wells and the nine CTRs also contributed to
lower sequential quarterly sales volumes. Average net sales of 9,094 Boepd
(87% oil) during March 2021 does not include approximately 200 Boepd
associated with the full restoration of certain third-party gas processing
facilities damaged during the storm.

For the first quarter of 2021, the Company realized an average sales price of
$58.00 per barrel for crude oil and $6.46 per Mcf for natural gas. Driving the
significantly higher natural gas price realization was a spike in natural gas
prices during the severe winter storm in February. The combined average
realized sales price for the period was $55.14 per Boe, up 54% from $36.61 per
Boe for the fourth quarter of 2020, and up 37% from $40.25 per Boe in the
first quarter of 2020. The average price differential the Company experienced
from WTI posting(2) price in the first quarter of 2021 was approximately
($0.37) per barrel of crude oil.  

Revenues were $39.5 million for the first quarter of 2021 compared to $31.4
million for the fourth quarter of 2020 and $39.6 million for the first quarter
of 2020. The 26% increase in first quarter 2021 revenues from the fourth
quarter 2020 was due to higher realized pricing partially offset by lower
sales volumes.

Lease Operating Expense (“LOE”): LOE, which includes base lease operating
expenses, expense workovers, and facilities maintenance, was $8.2 million, or
$11.48 per Boe, in the first quarter of 2021 versus $7.9 million, or $9.19 per
Boe, in the fourth quarter of 2020 and $8.4 million, or $8.57 per Boe, for the
first quarter of 2020. The severe winter storm in February contributed to the
unusual increase in first quarter 2021 LOE per Boe as compared to the fourth
quarter of 2020 due to lower sales volumes coupled with the additional cost of
bringing wells back online.

Gathering, Transportation and Processing (“GTP”) Costs: GTP costs were
$1.31 per Boe in the first quarter of 2021 versus $1.47 per Boe in the fourth
quarter of 2020 and $1.17 per Boe in the first quarter of 2020.

Ad Valorem Taxes: Ad valorem taxes were $1.03 per Boe for the first quarter of
2021 compared to $0.84 per Boe in the fourth quarter of 2020 and $0.82 per Boe
for the first quarter of 2020.

Production Taxes: Production taxes were $2.59 per Boe in the first quarter of
2021 compared to $1.75 per Boe in the fourth quarter of 2020 and $1.90 per Boe
in first quarter of 2020. As a percent of revenues, production tax remained
steady at 5% for all three periods.

Depreciation, Depletion and Amortization (“DD&A”) and Asset Retirement
Obligation Accretion: DD&A was $11.32 per Boe in the first quarter of 2021
versus $13.04 per Boe for the fourth quarter of 2020 and $13.92 in the first
quarter of 2020. Asset retirement obligation accretion was $0.27 per Boe in
the first quarter of 2021 compared to $0.25 per Boe for the fourth quarter of
2020 and $0.24 per Boe in the first quarter of 2020.

Operating Lease Expense:   Operating lease expense was $271,517 for the
first quarter of 2021 versus $319,483 for the fourth quarter of 2020 and
$289,051 in the first quarter of 2020. These expenses are primarily associated
with the Company’s office leases.

General and Administrative Expenses (“G&A”): G&A, excluding share-based
compensation, was $2.6 million, or $3.57 per Boe, versus $4.4 million, or
$5.09 per Boe, for the fourth quarter of 2020 and $2.4 million, or $2.40 per
Boe, in the first quarter of 2020. The approximate 40% sequential decrease in
G&A, excluding share-based compensation, for the first quarter 2021 was
primarily associated with higher costs during the fourth quarter for
management and personnel changes, severance and non-recurring legal and asset
divestiture fees.

Derivative (Loss) Gain: In the first quarter of 2021, Ring recorded a loss of
$31.6 million on its commodity derivative contracts, including a realized $5.9
million cash commodity derivative loss and an unrealized $25.7 million
non-cash commodity derivative loss, largely due to higher quarter-end oil and
natural gas prices compared to fourth quarter of 2020. This compared to a net
loss of $11.5 million in the fourth quarter of 2020, of which $15.2 million
was unrealized, and a gain of $50.4 million in the first quarter of 2020, of
which $47.1 million was unrealized.

In the first quarter of 2021, Ring added the following derivative positions:

                                                    Average        Weighted Avg.     
 Date Entered Into  Production Period   Instrument  Daily Volumes  Swap Price        
 Crude Oil - WTI                                    (Bbls)         (per Bbl)         
                                                                                     
 01/04/2021         Calendar year 2022  Swaps       250            $47.00            
 02/04/2021         Calendar year 2022  Swaps       250            $50.05            

On March 30, 2021, the Company unwound its remaining gas swaps for Calendar
year 2021 and 2022, resulting in the receipt of a cash payment of $581,424
that was recorded in the first quarter of 2021. A full listing of the
Company’s current outstanding derivative positions is included in the tables
shown later in this release.

Interest Expense: Interest expense, as reported in the income statement, in
the first quarter of 2021 was $3.7 million versus $4.7 million in the fourth
quarter of 2020 and $4.2 million for the first quarter of 2020. Contributing
to sequential quarterly decrease was a $35.7 million lower daily average
balance of borrowings for the first quarter 2021 compared to the fourth
quarter.

Income Tax: There was no non-cash income tax benefit or provision recorded in
the first quarter of 2021. The Company recorded a non-cash income tax
provision of $21.2 million in the fourth quarter of 2020 and $12.4 million for
the first quarter of 2020.  

Balance Sheet and Liquidity: Total liquidity increased 14% from December 31,
2020 to March 31, 2021. Liquidity at the end of the first quarter of 2021 was
$46.2 million, which consisted of cash and cash equivalents of $1.7 million
and $44.5 million of availability under Ring’s revolving bank credit
facility. At March 31, 2021, the Company had $305.5 million in borrowings on
its revolving credit facility, which has a current borrowing base of $350
million. Ring paid down $7.5 million of debt during the first quarter of 2021,
and is targeting further debt reduction in 2021 based on expected additional
free cash flow generation as well as potential asset sales during 2021.

The next regularly scheduled bank redetermination is underway, and Ring is
currently in compliance with all applicable covenants of its revolving credit
facility agreement.

Capital Expenditures and Asset Transfers: During the first quarter of 2021,
the Company finished drilling, completing and placing on production the four
wells of its NWS Phase I program. The Company also performed nine CTR
projects. Capital expenditures in the first quarter of 2021 were $14.5
million. In addition, during the first quarter of 2021, Ring received net
value consideration in cash of $2.0 million from VFOC for the sale and
exchange of certain oil and gas interests in Andrews County, Texas.

2021 Capital Investment Program & Sales Volumes Outlook

For full year 2021, the Company continues to anticipate total capital spending
of $44 million to $48 million, which includes the estimated cost to drill up
to six to eight horizontal wells and complete eight to 10 horizontal wells
primarily in its NWS asset area. Its full year capital spending outlook
includes targeted well reactivations, workovers, infrastructure upgrades, and
continuing its successful CTR program in its NWS and Central Basin Platform
areas. Also included in the full year estimate is anticipated spending for
leasing, contractual drilling obligations and non-operated drilling,
completion and capital workovers. Capital expenditures for 2021 will be fully
funded by cash on hand and cash from operations, with excess free cash flow
allocated to debt reduction.     

As previously announced, Ring is planning to launch a sales process during the
second quarter of 2021 to divest Delaware Basin assets. The Company
anticipates using the net proceeds from the potential sale to further reduce
its debt position.

Supported by its targeted development program and continued execution of its
successful CTR initiatives, and despite the negative impact to production
resulting from the severe winter storm in February, Ring continues to forecast
full year 2021 sales volumes to increase by 2% to 8% higher from full year
2020 average sales volumes of 8,790 Boe/d.

2021 Sales Volumes, Operating Expense and Capital Spending Guidance

The guidance for the full year 2021 in the table below represents the
Company's current best estimate of the range of likely future results.
Guidance could be affected by the factors described below in "Safe Harbor
Statement".

                                                                Full Year                        
                                                                2021                             
                                                                                                 
 Sales Volumes:                                                                                  
             Total (Boe/d)                                      9,000 - 9,500                    
                                                                                                 
 Operating Expenses:                                                                             
             Lifting cost ((1))(per Boe)                        $10.00 - $10.50                  
                                                                                                 
 Capital Program:                                                                                
             Number of new wells drilled                        6 - 8                            
             Number of new wells completed                      8 - 10                           
                                                                                                 
             Capital spending ((2))(millions)                   $44 - $48                        
                                                                                                 
 (1) Lifting cost equals lease operating expenses excluding severance and ad valorem tax divided by the total barrels of oil equivalent sold during the same period. 
                                                                                                 
 (2) In addition to Company-directed drilling and completion activities, the capital spending outlook includes funds for targeted well reactivations, workovers, infrastructure upgrades, and continuing the Company's successful CTR program in its Northwest Shelf and Central Basin Platform areas. Also included is anticipated spending for leasing, contractural drilling obligations and non-operated drilling, completion and capital workovers. 

Conference Call Information

Ring will hold a conference call on Tuesday, May 11, 2021 at 11:00 a.m. ET to
discuss its first quarter 2021 operational and financial results. To
participate, interested parties should dial 877-270-2148 at least five minutes
before the call is to begin. Please reference the “Ring Energy First Quarter
2021 Earnings Conference Call.” International callers may participate by
dialing 412-902-6510. The call will also be webcast and available on Ring’s
website at www.ringenergy.com under “Investors” on the “Events” page.
An audio replay will also be available on the Company’s website following
the call.

About Ring Energy, Inc.

Ring Energy, Inc. is an oil and gas exploration, development, and production
company with current operations focused on the conventional development of its
Permian Basin assets in West Texas and New Mexico. For additional information,
please visit www.ringenergy.com.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements involve a wide variety of risks and
uncertainties, and include, without limitations, statements with respect to
the Company’s strategy and prospects. Such statements are subject to certain
risks and uncertainties which are disclosed in the Company’s reports filed
with the SEC, including its Form 10-K for the fiscal year ended December 31,
2020, and its other filings with the SEC. Readers and investors are cautioned
that the Company’s actual results may differ materially from those described
in the forward-looking statements due to a number of factors, including, but
not limited to, the Company’s ability to acquire productive oil and/or gas
properties or to successfully drill and complete oil and/or gas wells on such
properties, general economic conditions both domestically and abroad, and the
conduct of business by the Company, and other factors that may be more fully
described in additional documents set forth by the Company.

Contact Information

David A. Fowler, Investor Relations
Ring Energy, Inc.
Phone: 432-682-7464
dfowler@ringenergy.com

Al Petrie, Senior Partner
Al Petrie Advisors
Phone: 504-258-9548
al@alpetrie.com



 RING ENERGY, INC.                                                                                                                                                 
 Statements of Operations                                                                                                                                          
 (Unaudited)                                                                                                                                                       
                                                                                                                                                                   
                                                                              Three Months Ended                                                                   
                                                                                  March 31,                   December 31,                   March 31,             
                                                                                  2021                        2020                           2020                  
                                                                                                                                                                   
 Oil and Natural Gas Revenues                                                 $   39,502,532              $   31,351,673                 $   39,570,328            
                                                                                                                                                                   
 Costs and Operating Expenses                                                                                                                                      
 Lease operating expenses                                                         8,226,575                   7,866,059                      8,421,388             
 Gathering, transportation and processing costs                                   935,019                     1,256,282                      1,149,618             
 Advalorem taxes                                                                  737,251                     717,766                        807,455               
 Oil and natural gas production taxes                                             1,852,762                   1,497,044                      1,870,245             
 Depreciation, depletion and amortization                                         8,108,158                   11,162,567                     13,682,996            
 Ceiling test impairment                                                          -                           129,564,000                    -                     
 Asset retirement obligation accretion                                            193,744                     212,503                        231,962               
 Operating lease expense                                                          271,517                     319,483                        289,051               
 General and administrative expense (including share-based compensation)          2,912,991                   7,164,619                      3,035,895             
                                                                                                                                                                   
 Total Costs and Operating Expenses                                               23,238,017                  159,760,323                    29,488,610            
                                                                                                                                                                   
 Income (Loss) Income from Operations                                             16,264,515                  (128,408,650  )                10,081,718            
                                                                                                                                                                   
 Other Income (Expense)                                                                                                                                            
 Interest income                                                                  -                           1                              5                     
 Interest expense                                                                 (3,741,969   )              (4,658,826    )                (4,248,498   )        
 (Loss) gain on derivative contracts                                              (31,588,639  )              (11,534,699   )                50,420,809            
 Deposit forfeiture income                                                        -                           5,500,000                      -                     
                                                                                                                                                                   
 Net Other Income (Expense)                                                       (35,330,608  )              (10,693,524   )                46,172,316            
                                                                                                                                                                   
 (Loss) Income Before Tax Provision                                               (19,066,093  )              (139,102,174  )                56,254,034            
                                                                                                                                                                   
 (Provision for) Benefit from Income Taxes                                        -                           (21,152,105   )                (12,449,916  )        
                                                                                                                                                                   
 Net (Loss) Income                                                            $   (19,066,093  )          $   (160,254,279  )            $   43,804,118            
                                                                                                                                                                   
 Basic (Loss) Earnings per Share                                              $   (0.19        )          $   (1.83         )            $   0.64                  
 Diluted (Loss) Earnings per Share                                            $   (0.19        )          $   (1.83         )            $   0.64                  
                                                                                                                                                                   
 Basic Weighted-Average Shares Outstanding                                        99,092,715                  87,503,079                     67,993,797            
 Diluted Weighted-Average Shares Outstanding                                      99,092,715                  87,503,079                     67,997,092            



 RING ENERGY, INC.                                                                                                                                                                                                                                                                                                                                              
 Condensed Operating Data                                                                                                                                                                                                                                                                                                                                       
 (Unaudited)                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                
                                                                                                 Three Months Ended                                                                                                                                                                                                                                             
                                                                                                                        March 31,                                                                                   December 31,                                                                                March 31,                                       
                                                                                                                        2021                                                                                        2020                                                                                        2020                                            
                                                                                                                                                                                                                                                                                                                                                                
 Net sales volumes:                                                                                                                                                                                                                                                                                                                                             
 Oil (Bbls)                                                                                                             610,121                                                                                     734,548                                                                                     855,603                                         
 Natural gas (Mcf)                                                                                                      637,808                                                                                     730,337                                                                                     765,551                                         
 Total oil and natural gas (Boe) ((1))                                                                                  716,422                                                                                     856,271                                                                                     983,195                                         
 % Oil                                                                                                                  85                     %                                                                    86                     %                                                                    87                     %                        
                                                                                                                                                                                                                                                                                                                                                                
 Average daily equivalent sales (Boe/d)                                                                                 7,960                                                                                       9,307                                                                                       10,804                                          
                                                                                                                                                                                                                                                                                                                                                                
 Average realized sales prices:                                                                                                                                                                                                                                                                                                                                 
 Oil ($/Bbl)                                                                                     $                      58.00                                                                $                      40.48                                                                $                      45.16                                           
 Natural gas ($/Mcf)                                                                                                    6.46                                                                                        2.21                                                                                        1.22                                            
 Barrel of oil equivalent ($/Boe)                                                                $                      55.14                                                                $                      36.61                                                                $                      40.25                                           
                                                                                                                                                                                                                                                                                                                                                                
 Average costs and expenses per Boe ($/Boe):                                                                                                                                                                                                                                                                                                                    
 Lease operating expenses                                                                        $                      11.48                                                                $                      9.19                                                                 $                      8.57                                            
 Gathering, transportation and processing costs                                                                         1.31                                                                                        1.47                                                                                        1.17                                            
 Ad valorem taxes                                                                                                       1.03                                                                                        0.84                                                                                        0.82                                            
 Oil and natural gas production taxes                                                                                   2.59                                                                                        1.75                                                                                        1.90                                            
 Depreciation, depletion and amortization                                                                               11.32                                                                                       13.04                                                                                       13.92                                           
 Asset retirement obligation accretion                                                                                  0.27                                                                                        0.25                                                                                        0.24                                            
 Operating lease expense                                                                                                0.38                                                                                        0.37                                                                                        0.29                                            
 General and administrative expense (including share-based compensation)                                                4.07                                                                                        8.37                                                                                        3.09                                            
 General and administrative expense (excluding share-based compensation)                                                3.57                                                                                        5.09                                                                                        2.40                                            
                                                                                                                                                                                                                                                                                                                                                                
 (1) Boe is determined using the ratio of six Mcf of natural gas to one Bbl of oil (totals may not compute due to rounding). The conversion ratio does not assume price equivalency and the price on an equivalent basis for oil and natural gas may differ significantly.                                                                                      



 RING ENERGY, INC.                                                                                                                                                                                                                                                         
 Balance Sheets                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                           
                                                                                                                                                                                  (Unaudited)                                                                              
                                                                                                                                                                                  March 31,                                                  December 31,                  
                                                                                                                                                                                  2021                                                       2020                          
                                                                                                                                                                                                                                                                           
 ASSETS                                                                                                                                                                                                                                                                    
 Current Assets                                                                                                                                                                                                                                                            
 Cash and cash equivalents                                                                                                                                                        $                                  1,700,510               $      3,578,634              
 Accounts receivable                                                                                                                                                                                                 20,898,591                     14,997,979             
 Joint interest billing receivable                                                                                                                                                                                   1,358,129                      1,327,262              
 Derivative receivable                                                                                                                                                                                               581,424                        499,906                
 Prepaid expenses and other assets                                                                                                                                                                                   230,909                        396,109                
 Total Current Assets                                                                                                                                                                                                24,769,563                     20,799,890             
                                                                                                                                                                                                                                                                           
 Properties and Equipment                                                                                                                                                                                                                                                  
 Oil and natural gas properties subject to amortization                                                                                                                                                              846,954,510                    836,514,815            
 Financing lease asset subject to depreciation                                                                                                                                                                       819,789                        858,513                
 Fixed assets subject to depreciation                                                                                                                                                                                1,700,460                      1,520,890              
 Total Properties and Equipment                                                                                                                                                                                      849,474,759                    838,894,218            
 Accumulated depreciation, depletion and amortization                                                                                                                                                                (208,174,599  )                (200,111,658  )        
 Net Properties and Equipment                                                                                                                                                                                        641,300,160                    638,782,560            
                                                                                                                                                                                                                                                                           
 Operating Lease Asset                                                                                                                                                                                               2,079,443                      1,494,399              
 Properties and Equipment                                                                                                                                                                                            2,196,321                      2,379,348              
                                                                                                                                                                                                                                                                           
 TOTAL ASSETS                                                                                                                                                                     $                                  670,345,487             $      663,456,197            
                                                                                                                                                                                                                                                                           
 LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                      
 Current Liabilities                                                                                                                                                                                                                                                       
 Accounts payable                                                                                                                                                                 $                                  41,386,222              $      32,500,081             
 Financing lease liability                                                                                                                                                                                           283,305                        295,311                
 Operating lease liability                                                                                                                                                                                           719,825                        859,017                
 Derivative liabilities                                                                                                                                                                                              24,546,980                     3,287,328              
 Total Current Liabilities                                                                                                                                                                                           66,936,332                     36,941,737             
                                                                                                                                                                                                                                                                           
 Revolving line of credit                                                                                                                                                                                            305,500,000                    313,000,000            
 Financing lease liability, less current portion                                                                                                                                                                     50,432                         126,857                
 Operating lease liability, less current portion                                                                                                                                                                     1,403,876                      635,382                
 Derivative liabilities                                                                                                                                                                                              5,277,469                      869,273                
 Asset retirement obligations                                                                                                                                                                                        15,025,895                     17,117,135             
                                                                                                                                                                                                                                                                           
 Total Liabilities                                                                                                                                                                                                   394,194,004                    368,690,384            
                                                                                                                                                                                                                                                                           
 Stockholders' Equity                                                                                                                                                                                                                                                      
 Preferred stock - $0.001 par value; 50,000,000 shares authorized; no shares issued or outstanding                                                                                                                   -                              -                      
 Common stock - $0.001 par value; 150,000,000 shares authorized; 99,275,937 shares and 85,568,287 shares issued and outstanding, respectively                                                                        99,276                         85,568                 
 Additional paid-in capital                                                                                                                                                                                          551,389,470                    550,951,415            
 Accumulated deficit                                                                                                                                                                                                 (275,337,263  )                (256,271,170  )        
                                                                                                                                                                                                                                                                           
 Total Stockholders' Equity                                                                                                                                                                                          276,151,483                    294,765,813            
                                                                                                                                                                                                                                                                           
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                       $                                  670,345,487             $      663,456,197            



 RING ENERGY, INC.                                                                                                                                                                                                                       
 Statements of Cash Flows                                                                                                                                                                                                                
 (Unaudited)                                                                                                                                                                                                                             
                                                                                                                                                                                                                                         
                                                                                                                                    Three Months Ended                                                                                   
                                                                                                                                                        March 31,                   December 31,                   March 31,             
                                                                                                                                                        2021                        2020                           2020                  
                                                                                                                                                                                                                                         
 Cash Flows From Operating Activities                                                                                                                                                                                                    
                      Net (loss) income                                                                                             $                   (19,066,093  )          $   (160,254,277  )            $   43,804,118            
                      Adjustments to reconcile net (loss) income to net cash provided by operating activities:                                                                                                                           
                      Depreciation, depletion and amortization                                                                                          8,108,158                   11,162,567                     13,682,996            
                      Ceiling test impairment                                                                                                           -                           129,564,000                    -                     
                      Accretion expense                                                                                                                 193,744                     212,503                        231,962               
                      Amortization of deferred financing costs                                                                                          183,027                     622,861                        189,082               
                      Share-based compensation                                                                                                          355,494                     2,807,006                      673,795               
                      Shares issued for services                                                                                                        -                           23,800                         -                     
                      Deferred income tax expense (benefit)                                                                                             (1,792,142   )              21,598,750                     12,028,380            
                      Excess tax expense (benefit) related to share-based compensation                                                                  1,792,142                   (446,645      )                421,536               
                      Change in fair value of derivative instruments                                                                                    31,588,639                  11,534,699                     (50,420,809  )        
                      Cash (paid) received for derivative settlements, net                                                                              (5,920,791   )              3,708,523                      3,334,128             
                      Changes in assets and liabilities:                                                                                                                                                                                 
                      Accounts receivable                                                                                                               (5,968,739   )              (1,970,509    )                6,915,357             
                      Prepaid expenses and retainers                                                                                                    165,200                     102,501                        3,584,453             
                      Accounts payable                                                                                                                  6,293,506                   8,845,188                      (6,614,029   )        
                      Settlement of asset retirement obligation                                                                                         (244,461     )              (255,018      )                (293,212     )        
                                                                                                                                                                                                                                         
                      Net Cash Provided by Operating Activities                                                                                         15,687,684                  27,255,949                     27,537,757            
                                                                                                                                                                                                                                         
 Cash Flows From Investing Activities                                                                                                                                                                                                    
                      Payments to purchase oil and natural gas properties                                                                               (258,970     )              (127,880      )                (480,048     )        
                      Payments to develop oil and natural gas properties                                                                                (11,898,939  )              (8,871,408    )                (24,463,138  )        
                      Payments to acquire or improve fixed assets                                                                                       (19,461      )              -                              -                     
                      Proceeds from divestiture of oil and natural gas properties                                                                       2,000,000                   (4,500,000    )                -                     
                      Purchase of fixed assets subject to depreciation                                                                                  -                           (55,339       )                -                     
                                                                                                                                                                                                                                         
                      Net Cash Used in Investing Activities                                                                                             (10,177,370  )              (13,554,627   )                (24,943,186  )        
                                                                                                                                                                                                                                         
 Cash Flows From Financing Activities                                                                                                                                                                                                    
                      Proceeds from revolving line of credit                                                                                            13,000,000                  -                              -                     
                      Payments on revolving line of credit                                                                                              (20,500,000  )              (47,000,000   )                -                     
                      Proceeds form issuance of common stock and warrants                                                                               161,269                     19,383,131                     -                     
                      Payment of deferred financing costs                                                                                               -                           (355,049      )                -                     
                      Reduction of financing lease liabilities                                                                                          (49,707      )              (71,587       )                (67,806      )        
                                                                                                                                                                                                                                         
                      Net Cash Used in (Provided by) Investing Activities                                                                               (7,388,438   )              (28,043,505   )                (67,806      )        
                                                                                                                                                                                                                                         
 Net (Decrease) Increase in Cash                                                                                                                        (1,878,124   )              (14,342,183   )                2,526,765             
 Cash at Beginning of Period                                                                                                                            3,578,634                   17,920,817                     10,004,622            
                                                                                                                                                                                                                                         
 Cash at End of Period                                                                                                              $                   1,700,510               $   3,578,634                  $   12,531,387            



 RING ENERGY, INC.                                                                                                                   
 Financial Commodity Derivative Positions                                                                                            
 As of May 10, 2021                                                                                                                  
                                                                                                                                     
                                                                Average        Weighted Avg.     Weighted Avg.     Weighted Avg.     
 Date Entered Into  Production Period         Instrument        Daily Volumes  Put Price         Call Price        Swap Price        
 Crude Oil - WTI                                                (Bbls)         (per Bbl)         (per Bbl)         (per Bbl)         
                                                                                                                                     
 02/25/2020         Calendar year 2021        Costless Collars  1,000          $45.00            $54.75                              
 02/25/2020         Calendar year 2021        Costless Collars  1,000          $45.00            $52.71                              
 02/27/2020         Calendar year 2021        Costless Collars  1,000          $40.00            $55.08                              
 03/02/2020         Calendar year 2021        Costless Collars  1,500          $40.00            $55.35                              
 11/25/2020         Calendar year 2021        Swaps             2,000                                              $45.37            
 12/02/2020         Calendar year 2021        Swaps             500                                                $45.38            
 12/03/2020         Calendar year 2021        Swaps             500                                                $45.00            
 12/04/2020         Calendar year 2021        Swaps             500                                                $45.40            
 12/04/2020         Calendar year 2021        Swaps             500                                                $45.60            
 12/07/2020         Calendar year 2021        Swaps             500                                                $45.96            
                                                                                                                                     
 12/04/2020         Calendar year 2022        Swaps             500                                                $44.22            
 12/07/2020         Calendar year 2022        Swaps             500                                                $44.75            
 12/10/2020         Calendar year 2022        Swaps             500                                                $44.97            
 12/17/2020         Calendar year 2022        Swaps             250                                                $45.98            
 01/04/2021         Calendar year 2022        Swaps             250                                                $47.00            
 02/04/2021         Calendar year 2022        Swaps             250                                                $50.05            
                                                                                                                                     
                                                                Average        Weighted Avg.     Weighted Avg.     Weighted Avg.     
 Date Entered Into  Production Period         Instrument        Daily Volumes  Put Price         Call Price        Swap Price        
 Natural Gas - Henry Hub                                        (MMBTU)        (per MMBTU)       (per MMBTU)       (per MMBTU)       
                                                                                                                                     
 11/04/2020         Calendar year 2021 ((1))  Swaps             6,000                                              $2.99             
                                                                                                                                     
 11/04/2020         Calendar year 2022 ((1))  Swaps             5,000                                              $2.7255           
                                                                                                                                     
                                                                                                                                     
 (1) On March 30, 2021, the Company unwound its remaining gas swaps for Calendar year 2021 and 2022, resulting in the receipt of a cash payment of $581,424. 





RING ENERGY, INC.

Non-GAAP Information

Certain financial information included in Ring’s financial results are not
measures of financial performance recognized by accounting principles
generally accepted in the United States, or GAAP. These non-GAAP financial
measures are “Adjusted Net Income”, “Adjusted EBITDA”, “Free Cash
Flow” and “Cash Flow from Operations”. Management uses these non-GAAP
financial measures in its analysis of performance. In addition, Adjusted
EBITDA is a key metric used to determine the Company’s incentive
compensation awards. These disclosures may not be viewed as a substitute for
results determined in accordance with GAAP and are not necessarily comparable
to non-GAAP performance measures which may be reported by other companies.

Reconciliation of Net (Loss) Income to Adjusted Net Income

Adjusted Net Income does not include the estimated after-tax impact of
share-based compensation, ceiling test impairment, and unrealized loss (gain)
on change in fair value of derivatives, as well an add back of the full
valuation against the Company’s deferred tax assets during the fourth
quarter of 2020. Adjusted Net Income is presented because the timing and
amount of these items cannot be reasonably estimated and affect the
comparability of operating results from period to period, and current periods
to prior periods.

                                                                                                                                                                                                                                            
                                                                                Three Months Ended                                                                                                                                          
                                                                                March 31,                                                     December 31,                                         March 31,                                
                                                                                2021                                                          2020                                                 2020                                     
                                                                                (Unaudited for All Periods)                                                                                                                                 
                                                                                                                                                                                                                                            
 Net (Loss) Income                                                              $                      (19,066,093  )                         $            (160,254,279  )                         $            43,804,118                  
                                                                                                                                                                                                                                            
                     Share-based compensation                                                          355,494                                             2,807,006                                            673,795                     
                     Ceiling test write impairment                                                     -                                                   129,564,000                                          -                           
                     Unrealized loss (gain) on change in fair value of derivatives                     25,667,848                                          15,243,222                                           (47,086,681  )              
                     Tax impact of adjusted items ((1))                                                -                                                   19,126,056                                           10,271,172                  
                                                                                                                                                                                                                                            
 Adjusted Net Income                                                            $                      6,957,249                              $            6,486,005                               $            7,662,404                   
                                                                                                                                                                                                                                            
 Weighted-Average Shares Outstanding                                                                   99,092,715                                          87,503,079                                           67,997,092                  
                                                                                                                                                                                                                                            
 Adjusted Net Income per Share                                                  $                      0.07                                   $            0.07                                    $            0.11                        
                                                                                                                                                                                                                                            
 (1) For the three months ended December 31, 2020, includes adding back the full valuation against the Company's deferred tax assets of $50,553,125.                                                                                        

 



RING ENERGY, INC.

Non-GAAP Information

Reconciliations of Adjusted EBITDA, Free Cash Flow and Cash Flow from
Operations

The Company also presents the non-GAAP financial measures Adjusted EBITDA and
Free Cash Flow. The Company defines Adjusted EBITDA as net (loss) income plus
net interest expense, unrealized loss on change in fair value of derivatives,
ceiling test impairment, income tax (benefit) expense, depreciation, depletion
and amortization and accretion, asset retirement obligation accretion and
share-based compensation. Company management believes this presentation is
relevant and useful because it helps investors understand Ring’s operating
performance and makes it easier to compare its results with those of other
companies that have different financing, capital and tax structures. Adjusted
EBITDA should not be considered in isolation from or as a substitute for net
income, as an indication of operating performance or cash flows from operating
activities or as a measure of liquidity. Adjusted EBITDA, as Ring calculates
it, may not be comparable to Adjusted EBITDA measures reported by other
companies. In addition, Adjusted EBITDA does not represent funds available for
discretionary use.

The Company defines Free Cash Flow as Adjusted EBITDA (defined above) less net
interest expense (excluding amortization of deferred financing cost) and
capital expenditures. For this purpose, the Company’s definition of capital
expenditures includes costs incurred related to oil and natural gas properties
(such as drilling and infrastructure costs and the lease maintenance costs)
and equipment, furniture and fixtures, but excludes acquisition costs of oil
and gas properties from third parties that are not included in the Company’s
capital expenditures guidance provided to investors. Company management
believes that Free Cash Flow is an important financial performance measure for
use in evaluating the performance and efficiency of its current operating
activities after the impact of accrued capital expenditures and net interest
expense and without being impacted by items such as changes associated with
working capital, which can vary substantially from one period to another.
There is no commonly accepted definition Free Cash Flow within the industry.
Accordingly, Free Cash Flow, as defined and calculated by the Company, may not
be comparable to Free Cash Flow or other similarly named non-GAAP measures
reported by other companies. While the Company includes net interest expense
in the calculation of Free Cash Flow, other mandatory debt service
requirements of future payments of principal at maturity (if such debt is not
refinanced) are excluded from the calculation of Free Cash Flow. These and
other non-discretionary expenditures that are not deducted from Free Cash Flow
would reduce cash available for other uses.

The following tables present (i) a reconciliation of the Company’s net
(loss) income, a GAAP measure, to Adjusted EBITDA and (ii) a reconciliation of
Adjusted EBITDA, a non-GAAP measure, to Free Cash Flow, as both Adjusted
EBITDA and Free Cash Flow are defined by the Company. In addition, a
reconciliation of cash flow from operations is presented.



                                                                                                                                                                                                                                      
                                                                                                                           Three Months Ended                                                                                         
                                                                                                                           March 31,                                      December 31,                     March 31,                  
                                                                                                                           2021                                           2020                             2020                       
                                                                                                                           (Unaudited for All Periods)                                                                                
                                                                                                                                                                                                                                      
 Net (Loss) Income                                                                                                         $                      (19,066,093  )          $      (160,254,279  )           $     43,804,118           
                                                                                                                                                                                                                                      
                         Interest expense, net                                                                                                    3,741,969                      4,658,825                       4,437,575            
                         Unrealized loss (gain) on change in fair value of derivatives                                                            25,667,848                     15,243,222                      (47,086,681  )       
                         Ceiling test impairment                                                                                                  -                              129,564,000                     -                    
                         Income tax expense (benefit)                                                                                             -                              21,152,105                      12,449,916           
                         Depreciation, depletion and amortization                                                                                 8,108,158                      11,162,567                      13,682,996           
                         Asset retirement obligation accretion                                                                                    193,744                        212,503                         231,962              
                         Share-based compensation                                                                                                 355,494                        2,807,006                       673,795              
                                                                                                                                                                                                                                      
 Adjusted EBITDA                                                                                                           $                      19,001,120              $      24,545,949                $     28,193,681           
                                                                                                                                                                                                                                      
 Adjusted EBITDA Margin                                                                                                                           48           %                 78            %                 71           %       
                                                                                                                                                                                                                                      
 Weighted-Average Shares Outstanding                                                                                                              99,092,715                     87,503,079                      67,997,092           
                                                                                                                                                                                                                                      
 Adjusted EBITDA per Share                                                                                                 $                      0.19                    $      0.28                      $     0.41                 
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
                                                                                                                           Three Months Ended                                                                                         
                                                                                                                           March 31,                                      December 31,                     March 31,                  
                                                                                                                           2021                                           2020                             2020                       
                                                                                                                           (Unaudited for All Periods)                                                                                
                                                                                                                                                                                                                                      
 Adjusted EBITDA                                                                                                           $                      19,001,120              $      24,545,949                $     28,193,681           
                                                                                                                                                                                                                                      
                         Net interest expense (excluding amortization of deferred financing costs)                                                (3,558,942   )                 (4,035,964    )                 (4,248,493   )       
                         Capital expenditures                                                                                                     (14,525,436  )                 (7,814,361    )                 (15,973,186  )       
                         Proceeds from divestiture of oil and natural gas properties                                                              2,000,000                      -                               -                    
                                                                                                                                                                                                                                      
 Free Cash Flow                                                                                                            $                      2,916,742               $      12,695,624                $     7,972,002            
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
                                                                                                                           Three Months Ended                                                                                         
                                                                                                                           March 31,                                      December 31,                     March 31,                  
                                                                                                                           2021                                           2020                             2020                       
                                                                                                                           (Unaudited for All Periods)                                                                                
                                                                                                                                                                                                                                      
 Net Cash Provided by Operating Activities                                                                                 $                      15,687,684              $      27,255,949                $     27,537,757           
 Changes in operating assets and liabilities                                                                                                      (245,506     )                 (6,722,162    )                 (3,592,569   )       
                                                                                                                                                                                                                                      
 Cash Flow from Operations                                                                                                 $                      15,442,178              $      20,533,787                $     23,945,188           
                                                                                                                                                                                                                                      

(1) A non-GAAP financial measure; see “Non-GAAP Information” later in this
release for more information including reconciliations to the most comparable
GAAP measures.

(2) WTI posting price per Bbl of oil is based on NYMEX.

(https://www.globenewswire.com/NewsRoom/AttachmentNg/cee6b8d0-5688-4086-91ec-5916959b76fb)



GlobeNewswire, Inc. 2021
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