Press Release
  

FOR IMMEDIATE RELEASE
March 16, 2015 NYSE American: REI

RING ENERGY ANNOUNCES FINANCIAL AND OPERATIONAL RESULTS FOR
FOURTH QUARTER AND YEAR END 2014

2014 Revenues Increase 269%
Fourth Quarter Revenues Increase 98%
Proved Reserves Increase 43%

Midland, TX. March 16, 2015 – Ring Energy, Inc. (NYSE American: REI) (“Ring”)(“Company”) announced today financial results for the fourth quarter and year ended December 31, 2014.

Ring had net income of $2,708,604, a 76% increase, on oil and gas revenues of $9,984,982, a 98% increase, for the fourth quarter compared to net income of $1,534,957 on revenues of $5,051,434 for the fourth quarter ended December 31, 2013. For the year ended December 31, 2014, Ring had net income of $8,420,500 on revenues of $38,089,443, as compared to a loss of $452,209 on revenues of $10,315,701 for the year ended December 31, 2013. Income attributable to common shares for the fourth quarter was $0.10 per diluted share compared to $0.08 for the fourth quarter ended December 31, 2013. For the year ended December 31, 2014, the income attributable to common shares was $0.33 per diluted share compared to a loss of $0.03 per diluted share for the year ended December 31, 2013.

The increase in revenue is attributed to an increase in production, primarily due to development activities. For the three months ended December 31, 2014, oil sales volume increased to 150,036 barrels, compared to 54,557 barrels for the same period in 2013, and gas sales volume increased to 14,784 MCF (thousand cubic feet), compared to 13,607 MCF for the same period in 2013. For the twelve months ended December 31, 2014, oil sales volume increased to 457,039 barrels, compared to 109,673 barrels for the same period in 2013, and gas sales volume increased to 38,735 MCF, compared to 36,047 MCF for the same period in 2013. The average commodity prices received by Ring were $66.39 per barrel of oil and $2.36 per MCF of natural gas for the quarter ended December 31, 2014, compared to $91.41 per barrel of oil and $4.72 per MCF of natural gas for the quarter ended December 31, 2013. The average prices received for the twelve months ended December 31, 2014 were $83.06 per barrel of oil and $3.53 per MCF of natural gas, compared to $92.81 per barrel of oil and $3.82 per MCF of natural gas for the twelve month period ended December 31, 2013. In January, the company stated that net production for the fourth quarter was approximately 155,100 BOE (Barrel of Oil Equivalent). Total net sales production for the fourth quarter of 2014 was 152,500 BOE, as compared to 56,825 BOE for the same period in 2013, an increase of 168%. The remaining fourth quarter production that was not sold in 2014 was held in storage and sold in the first quarter of 2015. Net sales production for the full year 2014 was 463,495 BOE, compared to 115,681 BOE in 2013, an increase of 301%.

Lease operating expenses, including production taxes, for the three months ended December 31, 2014 were $14.82 per barrel of oil equivalent (“BOE”). Depreciation, depletion and amortization costs, including accretion, were $15.45 per BOE. General and administrative costs, which included a $586,876 charge for stock based compensation, were $11.72 per BOE. For the twelve months ended December 30, 2014, lease operating expenses, including production taxes, were $14.57 per BOE. Depreciation, depletion and amortization costs, including accretion, were $25.81 per BOE, and general and administrative costs, which included a $2,517,211 charge for stock based compensation, were $14.68 per BOE.

Cash provided by operating activities, before changes in working capital, for the three and twelve months ended December 31, 2014 was $6,532,258, or $0.24 per fully diluted share, and $27,223,267, or $1.05 per fully diluted share, compared to $3,246,839 and $5,552,286, or $0.16 and $0.34 per fully diluted share for the same periods in 2013. Earnings before interest, taxes, depletion and other non-cash items (“Adjusted EBITDA”) for the three and twelve months ended December 31, 2014 was $6,611,916, or $0.25 per fully diluted share, and $27,137,303, or $1.05 per fully diluted share, compared to $3,244,263 and $5,537,470, or $0.16 and $0.34 in 2013. (See accompanying table for a reconciliation of net income to adjusted EBITDA.)

There was no outstanding debt on the Company’s $150 million senior secured credit facility at January 1, 2015.

Proved reserves, as determined by Cawley, Gillespie and Associates, totaled 10,407,009 barrel of oil equivalents (BOE), a 43% increase over the 7,270,163 BOE for the previous year. Future net revenues before income taxes, discounted at 10% (“PV-10”), based on $85.10 per barrel of oil and $3.95 per MCF of gas, were $281.7 million at year-end 2014. This compared to $198.4 million, using average prices of $92.54 per barrel of oil and $5.88 per MCF of gas, for year-end 2013.

Mr. Kelly Hoffman, the Company’s Chief Executive Officer, stated, “As we stated in our operations update on January 29th, we returned the three drilling rigs we had working on our Permian Basin properties and discontinued all drilling activity due to the rapid drop in commodity prices. Our staff has, and continues to work very hard with all our vendors and service providers to cut the costs of services and supplies. We drilled 135 new development wells in 2014 and are ready to resume our drilling activity once we see prices stabilize. We continue to be patient. We have the benefit of a strong balance sheet and will continue to evaluate acquisition opportunities we feel could increase our production, reserves, and ultimately, shareholder value.”

Non-GAAP Financial Measures:
Earnings for the three months ended December 31, 2014 include a non-cash charge for stock based compensation of $586,876. Earnings for the twelve months ended December 31, 2014 include a non-cash charge for stock based compensation of $2,517,211. Excluding such items, the Company’s earnings would have been $0.12 per diluted share for the three months ended December 31, 2014, and $0.39 for the twelve months ended December 31, 2014. The Company believes results excluding these items are more comparable to estimates provided by security analysts and, therefore, are useful in evaluating operational trends of the Company and its performance, compared to other similarly situated oil and gas producing companies.

RING ENERGY, INC.
STATEMENTS OF OPERATIONS
  Three Months Ended
December 31,
Twelve Months Ended
December 31,
 
2014
2013
2014
2013
Oil and Gas Revenues
$ 9,984,982 $ 5,051,434 $ 38,089,443 $ 10,315,701
     
Cost and Operating Expenses
   
     Oil and gas production costs 1,796,259 560,624 4,993,166 1,207,529
     Oil and gas production taxes 463,102 233,344 1,760,206 476,964
     Depreciation, depletion and amortization 2,304,914 626,705 11,807,794 2,284,091
     Asset retirement obligation accretion 50,731 16,498 154,973 53,681
     General and administrative expense 1,787,630 2,004,179 6,803,029 6,682,760
     
     Total Costs and Operating Expenses 6,402,636 3,441,350 25,519,168 10,705,025
     
Income (Loss) from Operations 3,582,346 1,610,084 12,570,275 (389,324)
     
Other Income (Expense)    
     Interest income 7,391 12,464 85,964 24,706
     Interest expense (9,890) (9,890)
     
     Net Other Income 7,391 2,574 85,964 14,816
     
Income (Loss) Before Provision for Income Taxes 3,589,737 1,612,658 12,656,239 (374,508)
     
Provision for Income Taxes (881,133) (77,701) (4,235,739) (77,701)
     
Net Income (Loss) $ 2,708,604 $ 1,534,957 $ 8,420,500 ($452,209)
     
Basic Net Income (Loss) Per Common Share $0.10 ($0.08) $0.34 ($0.03)
Diluted Net Income (Loss) Per Common Share $0.10 ($0.08) $0.33 ($0.03)
         
For the years ended December 31,     2014 2013
         
Net Income (Loss)     $ 7,974,956 ($452,209)
Basic Weighted-Average Shares Outstanding     24,739,795 16,376,911
Diluted Weighted-Average Shares Outstanding     25,890,285 16,376,911
Basic Earnings (Loss) per Share     $ 0.32 ($0.03)
Diluted Earnings (Loss) per Share     $ 0.31 ($0.03)
     

RING ENERGY, INC.
COMPARATIVE OPERATING STATISTICS
    Three Months Ended December 31,
    2014
2013
Change
Net Production - BOE per day
  1,658 618 168%
Per BOE:    
     Average Sales Price   $65.48 $88.89 -26%
             
     Lease Operating Expenses   11.78 9.87 19%
     Production Taxes   3.04 4.11 -26%
     DD&A   15.11 11.03 37%
     General and Administrative Expenses   11.72 35.27 -67%
     
    Twelve Months Ended December 31,
    2014 2013 Change
Net Production - BOE per day   1,270 317 301%
Per BOE:        
     Average Sales Price   $ 82.18 $ 89.17 -8%
         
     Lease Operating Expenses   10.77 10.44 3%
     Production Taxes   3.80 4.12 -8%
     DD&A   25.48 19.74 29%
     General and Administrative Expenses   14.68 57.77 -75%

RING ENERGY, INC.
CONSOLIDATED BALANCE SHEET
 
December 31,
2014
December 31,
2013
ASSETS
   
Current Assets
   
     Cash $ 8,622,235 $52,350,583
     Accounts receivable 3,616,676 3,888,402
     Joint interest billing receivable 2,683,787  
     Prepaid expenses and retainers 160,600 66,051
     Total Current Assets 15,083,298 56,305,036
Property and Equipment    
     Oil and Gas properties subject to amortization 166,036,400 58,040,724
     Office Equipment 1,209,809 257,911
        Total Property Equipment 167,246,209 58,298,635
     Less: Accumulated depreciation and amortization (14,688,047) (2,880,253)
     Net Property and Equipment 152,558,162 55,418,382
Total Assets $ 167,641,460 $111,723,418
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities    
     Accounts payable $ 16,241,022 $6,229,490
     Other accrued liabilities 22,029 1,002,153
     Total Current Liabilities 16,263,051 7,231,643
     Deferred income taxes 4,939,390 703,651
     Asset retirement obligation 3,896,489 1,182,410
     Total Liabilites 25,098,930 9,117,704
     
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
   
     25,734,467 shares and 23,576,313 shares
     outstanding, respectively
25,734 23,576
     Additional paid-in capital 140,532,323 109,018,165
     Accumulated deficit 1,984,473 (6,436,027)
     Total Stockholders' Equity 142,542,530 102,605,714
Total Liabilities and Stockholders' Equity $ 167,641,460 $111.723,418
     

RING ENERGY, INC.
STATEMENTS OF CASH FLOW
  December 31, December 31,
 
2014
2013
Cash Flows From Operating Activities
   
     Net Income (loss) $ 8,420,500 ($452,209 )
     Adjustments to reconcile net income to net cash
     Provided by operating activities:
   
       Depreciation, depletion and amortization 11,807,794 2,284,091
       Accretion expense 154,973 53,681
       Shared-based compensation 2,517,211 3,489,022
       Stock issued for services 87,050 100,000
       Deferred income tax expense (benefit) 4,235,739 77,701
       Changes in assets and liabilities:    
       Accounts receivable (2,412,061) (3,470,437)
       Prepaid expenses (94,549) (5,653)
       Accounts payable 9,031,408 6,040,212
Net Cash Provided by Operating Activities 33,748,065 8,116,408
Cash Flows from Investing Activities    
     Payments to purchase oil and natural gas properties (15,054,649) (5,192,441)
     Payments to develop oil and natural gas properties (90,160,236) (29,103,392)
     Purchase of equipment and vehicles and leasehold improvements (951,898) (82,805)
     Plugging and abandonment cost incurred (39,316) (60,544)
     Net Cash Used in Investing Activities (106,206,099) (34,439,182)
Cash Flows from Financing Activities    
     Proceeds from option exercise 215,000 67,500
     Proceeds from issuance of common stock 28,514,686 73,201,690
Net Cash Provided by Financing Activities 28,729,686 73,269,190
Net Increase (Decrease) in Cash (43,728,348) 46,946,416
Cash at Beginning of Period 52,350,583 5,404,167
Cash at End of Period $ 8,622,235 $ 52,350,583
     
Supplemental Cash flow Information    
     Cash paid for interest $ 9,890
     
Non-Cash Investing and Financing Activities    
     Asset retirement obligation assumed 575,977
     Revision of asset retirement obligation estimate 211,691
     Asset retirement obligation incurred during development 2,022,445 481,296
     Payments with Ring Energy, Inc. shares 182,369
     
RECONCILIATION OF CASH FLOW FROM OPERATIONS
Net cash provided by operating activities $ 33,748,065 $ 8,116,408
Change in operating assets and liabilities 6,524,798 2,564,122
     
Cash flow from operations $ 27,223,267 5,552,286,
Management believes that the non-GAAP measure of cash flow from operations is useful information for investors because it is used internally and is accepted by the investment community as a means of measuring the Company's ability to fund its capital program. It is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.
     

RING ENERGY, INC.
NON-GAAP DISCLOSURE RECONCILIATION
ADJUSTED EBITDA
 
 
December 31,
2014
December 31,
2013
NET INCOME (LOSS)
$ 8,420,500 (($452,209)
     
     Interest (Income) (85,964) (24,706)
     Interest expense 9,890
     Income tax expense 4,235,739 77,701
     Depreciation, depletion and amortization 11,807,794 2,284,091
     Accretion of discounted liabilities 154,973 53,681
     Stock based compensation 2,517,211 3,489,022
     Stock issued as finders fee 87,050 100,000
     
ADJUSTED EBITDA $ 27,137,303 $ 5,537,470
     


About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration, development and production company with current operations in Texas and Kansas.

Safe Harbor Statement
This release contains forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 that involve a wide variety of risks and uncertainties, including, 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, 2014, its Form 10-Q for the quarter ended March 31, 2015 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.

For further information contact:
Bill Parsons, K M Financial, Inc.
(702) 489-4447 office
(602) 315-5926 mobile


 
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  May 5, 2015

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  April 16, 2015

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  March 16, 2015

RING ENERGYANNOUNCES FINANCIAL AND OPERATIONAL RESULTS FOR FOURTH QUARTER AND YEAR END 2014
2014 Revenues Increase 269%
Fourth Quarter Revenues Increase 98%
Proved Reserves Increase 43%
 
  March 9, 2015

RING ENERGY, INC. SCHEDULES CONFERENCE CALL ON ITS 2014 4TH QUARTER AND YEAR END FINANCIAL AND OPERATING RESULTS
 
  January 29, 2015

RING ENERGY, INC. ANNOUNCES FOURTH QUARTER AND YEAR END 2014 UPDATE
Company Production Increases 297% Over 2013 Management Discusses 2015 Strategy
 
 
 

 
   
   

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Ring Energy, Inc. is an independent oil and gas exploration company with headquarters in Midland, Texas. Ring Energy’s business strategy is focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States.

   
   

 

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