Press Release
  

FOR IMMEDIATE RELEASE
May 6, 2015 NYSE MKT: REI

RING ENERGY ANNOUNCES FINANCIAL RESULTS FOR FIRST QUARTER 2015

Midland, TX. May 6, 2015 – Ring Energy, Inc. (NYSE MKT: REI) (“Ring”)(“Company”) announced today financial results for the first quarter ended March 31, 2015. For the three month period ended March 31, 2015, Ring had oil and gas revenues of $6,045,701 compared to $5,970,452 for the quarter ended March 31, 2014, a 1% increase, and a net loss of $975,624, or $0.04 per diluted share, compared to net income of $1,163,689 or $0.05 per diluted share, for the same period in 2014. The primary reason for this change was lower received oil and gas prices.

For the three months ended March 31, 2015, oil sales volume increased to 137,090 barrels, compared to 63,944 barrels for the same period in 2014, a 114% increase, and gas sales volume increased to 19,848 MCF (thousand cubic feet), compared to 8,617 MCF for the same period in 2014, a 130% increase. The remaining production that was not sold by March 31, 2015, was held in storage and sold in the second quarter. The average commodity prices received by Ring were $43.76 per barrel of oil and $2.36 per MCF of natural gas for the quarter ended March 31, 2015, compared to $92.71 per barrel of oil and $4.88 per MCF of natural gas for the quarter ended March 31, 2014.

Lease operating expenses for the three months ended March 31, 2015 were $13.30 per barrel of oil equivalent (“BOE”). Depreciation, depletion and amortization costs were $26.03 per BOE, and general and administrative costs, which included a $654,688 charge for stock-based compensation, were $12.31 per BOE.

Net cash flow from operations for the three months ended March 31, 2015 was $2,827,356,or $0.11 per diluted share, compared to net cash flow of $4,061,171, or $0.16 per diluted share for the same period in 2014 (1).

Upon year-end review and redetermination, SunTrust Robinson Humphrey, Inc. stated the Company’s $150 million senior secured credit facility with a current borrowing base of $40 million would remain in place. There was outstanding debt of $10,000,000 on the credit facility at March 31, 2015.

Ring’s Chief Executive Officer, Mr. Kelly Hoffman, stated, “We continue to be patient. Our staff and field personnel are working diligently to maximize the performance of our existing wells, while reducing our overall costs. We were cash flow positive in the first quarter. This was the result of over a 100% increase in production, even though we had over a 50% drop in prices we received a year ago. We have been encouraged by the recent improvement in commodity prices and are anxious to re-start our development program.”

(1) Cash Flow from Operations is a non-GAAP financial measure that represents “Net Cash Provided By Operating Activities” adjusted for the change in operating assets and liabilities. See below for a reconciliation of the related amounts.

RING ENERGY, INC.
STATEMENTS OF OPERATIONS
    Three Months Ended
March 31,
 


2015
(Unaudited)
2014
(Unaudited)
Oil and Gas Revenues
    $ 6,045,701 $ 5,970,452
     
Cost and Operating Expenses
   
     Oil and gas production costs     1,867,795 771,100
     Oil and gas production taxes     277,031 275,961
     Depreciation, depletion and amortization     3,654,298 1,530,196
     Accretion expense     66,979 24,382
     General and administrative expense     1,728,987 1,564,461
     
     Total Costs and Operating Expenses     7,595,090 4,166,100
     
Other Income (Expense)    
     Interest income     780 42,773
     
     Net Other Income     780 42,773
     
Income (Loss) Before Tax Provision     (1,548,609) 1,847,125
     
(Provision For) Benefit From Income Taxes     572,985 (683,436)
     
Net Income (Loss)     ($975,624) $ 1,163,689)
     
Basic Earnings (Loss) Per Common Share     ($0.04) $0.05
Diluted Earnings (Loss) Per Common Share     ($0.04) $0.05
         
Basic Weighted-Average Common Shares Outstanding     25,746,513 23,581,357
Diluted Weighted-Average Common Shares Outstanding     25,746,513 24,704,652
     

RING ENERGY, INC.
COMPARATIVE OPERATING STATISTICS
    Three Months Ended March 31,
    2015
2014
Change
Net Production - BOE per day
  1,560 726 115%
Per BOE:    
     Average Sales Price   $ 43.06 $ 91.32 -53%
             
     Operating Costs   13.30 11.79 13%
     DD&A   26.03 23.40 11%
     General and Administrative Expenses   12.31 23.93 -49%

RING ENERGY, INC.
CONSOLIDATED BALANCE SHEET
 
March 31,
2015
December 31,
2014
ASSETS
   
Current Assets
   
     Cash $ 2,850,125 $ 8,622,235
     Accounts receivable 2,853,940 3,616,676
     Joint interest billing receivable 3,001,085 2,683,787
     Prepaid expenses and retainers 149,731 160,600
     Total Current Assets 8,854,881 15,083,298
Property and Equipment, Using Full cost Accounting    
     Oil and Gas properties subject to amortization 175,689,596 166,036,400
     Office equipment and automobiles 1,374,213 1,209,809
        Total Property and Equipment 177,063,809 167,246,209
     Accumulated depreciation, depletion and amortization (18,342,345) (14,688,047)
     Net Property and Equipment 158,721,464 152,558,162
Total Assets $ 167,576,345 $167,641,460
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities    
     Accounts payable $ 6,930,803 $16,241,022
     Other accrued liabilities 22,029
     Total Current Liabilities 6,930,803 16,263,051
     Deferred income taxes 4,366,405 4,939,390
     Long term debt 10,000,000
     Asset retirement obligation 3,995,043 3,896,489
     Total Liabilites 25,292,251 25,098,930
     
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
   
     25,767,582 shares and 25,734,467 shares
     outstanding, respectively
25,767 25,734
     Additional paid-in capital 141,249,478 140,532,323
     Retained Earnings 1,008,849 1,984,473
     Total Stockholders' Equity 142,284,094 142,542,530
Total Liabilities and Stockholders' Equity $ 167,576,345 $167,641,460
     

RING ENERGY, INC.
STATEMENTS OF CASH FLOW
  Three Months Ended
  March 31, March 31,
 
2015
2014
Cash Flows From Operating Activities
   
     Net Income ($975,624) $ 1,163,689
     Adjustments to reconcile net income to net cash
     Provided by operating activities:
   
       Depreciation, depletion and amortization 3,654,298 1,530,196
       Accretion expense 66,979 24,382
       Shared-based compensation 654,688 659,468
       Deferred income taxes (572,985) 683,436
       Changes in assets and liabilities:    
       Accounts receivable 445,438 1,007,275
       Prepaid expenses 10,869 18,838
       Accounts payable (9,332,248 2,438,191
Net Cash Provided by Operating Activities (6,048,585) 7,525,475
Cash Flows from Investing Activities    
     Payments to purchase oil and natural gas properties (954,458) (8,121,630)
     Payments to develop oil and natural gas properties (8,667,163) (13,858,512)
     Payments to purchase equipment and leasehold improvements (164,404) (123,851)
     Net Cash Used in Investing Activities (9,786,025) (22,103,993)
Cash Flows from Financing Activities    
     Proceeds from option exercise 62,500 22,500
     Payment of offering costs (61,719)
     Proceeds from issuance of notes payable 10,000,000
Net Cash Provided by Financing Activities 10,062,500 (39,219)
Net Increase (Decrease) in Cash (5,772,110) (14,617,737)
Cash at Beginning of Period 8,622,235 52,350,583
Cash at End of Period $ 2,850,125 $ 37,732,846
     
Non-Cash Investing and Financing Activities    
     Asset retirement obligation acquired $ 294,772
     Asset retirement obligation incurred during development 31,575 299,660
     
RECONCILIATION OF CASH FLOW FROM OPERATIONS
Net cash provided by operating activities ($6,048,585) $ 7,525,475
Change in operating assets and liabilities 8,875,941 (3,464,304)
     
Cash flow from operations $ 2,827,356 $ 4,061,171
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
 
 
March 31,
2015
March 31,
2014
NET INCOME (LOSS)
($975,624) $ 1,163,689
     
     Interest expense (Income) (780) (42,773)
     Deferred Income taxes (572,985) 683,436
     Depreciation, depletion and amortization 3,654,298 1,530,196
     Accretion expense 66,979 24,382
     Share-based compensation 654,688 659,468
     
ADJUSTED EBITDA $ 2,826,576 $ 4,018,398
     


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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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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