Press Release
  

FOR IMMEDIATE RELEASE
November 8, 2016 NYSE American: REI

RING ENERGY INC. ANNOUNCES THIRD QUARTER AND NINE MONTH 2016 FINANCIAL
AND OPERATING RESULTS

Midland, TX. November 8, 2016 – Ring Energy, Inc. (NYSE American: REI) (“Ring”)(“Company”) announced today financial results for the three months and nine months ended September 30, 2016. For the three month period ended September 30, 2016, Ring had oil and gas revenues of $7,822,543, compared to $8,629,007 for the quarter ended September 30, 2015. For the nine month period ended September 30, 2016, the Company reported oil and gas revenues of $21,019,540, compared to oil and gas revenues of $23,651,498 for the nine month period ended September 30, 2015. For the third quarter of 2016, Ring reported a net loss of $5,944,137, or $0.14 per diluted share, which included a pre-tax non-cash impairment of $9,648,942. Excluding the impairment, the net gain per diluted share would have been $0.01. For the nine months ended September 30, 2016, the Company reported a net loss of $37,160,681, or $1.00 per diluted share, which included a pre-tax non-cash impairment of $56,513,016. Excluding the impairment, the net loss per diluted share would have been $0.04. This information compares to a net loss of $1,138,268, or $0.04 per fully diluted share, for the three months ended September 30, 2015, and a net loss for the nine month period ended September 30, 2015 of $1,579,725, or $0.06 per fully diluted share.

For the three months ended September 30, 2016, oil sales volume decreased to 174,707 barrels, compared to 181,069 barrels for the same period in 2015, a 4% decrease, and gas sales volume increased to 229,456 MCF (thousand cubic feet), compared to 165,942 MCF for the same period in 2015, a 38% increase. On a barrel of oil equivalent (“BOE”) basis for the three months ended September 30, 2016 production sales increased to 212,950 BOEs, compared to 208,726 BOEs for the same period in 2015, a 2% increase. For the nine months ended September 30, 2016, oil sales volume increased to 527,010 barrels, compared to 483,918 barrels for the same period in 2015, a 9% increase and gas sales volume increased to 688,196 MCF, compared to 280,307 MCF for the same period in 2015, a 146% increase. On a BOE basis for the nine months ended September 30, 2016 production sales increased to 641,709 BOEs, compared to 530,636 BOEs for the same period in 2015, a 21% increase.

The average commodity prices received by Ring were $40.83 per barrel of oil and $3.01 per MCF of natural gas for the quarter ended September 30, 2016, compared to $45.24 per barrel of oil and $2.63 per MCF of natural gas for the quarter ended September 30, 2015. The average prices received for the nine months ended September 30, 2016 were $36.72 per barrel of oil and $2.42 per MCF of natural gas, compared to $47.31 per barrel of oil and $2.70 per MCF of natural gas for the nine month period ended September 30, 2015.

Lease operating expenses, including production taxes, for the three months ended September 30, 2016 were $12.77 per BOE, a 20% decrease from the prior year. Depreciation, depletion and amortization costs, including accretion, decreased 45% to $12.65 per BOE. General and administrative costs, which included a $555,587 charge for stock based compensation, were $8.84 per BOE, an 8% decrease. For the nine months ended September 30, 2016, lease operating expenses, including production taxes, were $12.55 per BOE, a 18% decrease. Depreciation, depletion and amortization costs, including accretion, were $13.87 per BOE, a 38% decrease, and general and administrative costs, which included a $1,647,554 charge for stock based compensation, were $9.39 per BOE, a 14% decrease from 2015.

Cash provided by operating activities, before changes in working capital, for the three and nine months ended September 30, 2016 was $3,687,847, or $0.09 per fully diluted share, and $8,077,511, or $0.22 per fully diluted share, compared to $3,600,788 and $11,309,746, or $0.12 and $0.41 per fully diluted share for the same periods in 2015. Earnings before interest, taxes, depletion and other non-cash items (“Adjusted EBITDA”) for the three and nine months ended September 30, 2016 was $3,777,294, or $0.09 per fully diluted share, and $8,591,950, or $0.23 per fully diluted share, compared to $3,949,694 and $11,736,875, or $0.13 and $0.43 in 2015. (See accompanying table for a reconciliation of net income to adjusted EBITDA).

There was no outstanding debt on the Company’s $500 million senior secured credit facility at September 30, 2016.

Ring’s Chief Executive Officer, Mr. Kelly Hoffman, stated, “In the third quarter we continued to work hard at cutting costs and maximizing efficiencies. On a BOE basis we reduced our operating costs over 7% while increasing are overall production by 9.5% compared to our second quarter this year. We drilled and completed three new vertical development wells – one on our Central Basin Property (“CBP”) and two on our Delaware Basin (“Delaware”) asset. We also completed one new vertical well on our Delaware that was drilled in the second quarter. That well was drilled through the Cherry Canyon formation to the Brushy Canyon for the purpose of obtaining new logs and core samples which are critical as we start to put together our 2017 capital expenditure budget. We also drilled our first three horizontal San Andres wells on our CBP which are in varying stages of completion. Based on the oil production we are currently seeing we are extremely encouraged and are hopeful we will see peak production towards the end of the fourth quarter. We reported in September that we have doubled our horizontal footprint in the CBP and are continuing to aggressively look for opportunities to continue that growth.”

Non-GAAP Financial Measures:

Net loss for the three months ended September 30, 2016 includes a non-cash charge for stock based compensation of $555,587, and a ceiling test impairment charge of $9,648,942. Excluding such items, the Company’s net earnings would have been $0.01 per diluted share. Net loss for the nine months ended September 30, 2016 includes a non-cash charge for stock based compensation of $1,647,554, and a ceiling test impairment charge of $56,513,016. Excluding such items, the Company’s net loss would have been $0.01 per diluted share. 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
September 30,
Nine Months Ended
September 30,
  2016
(Unaudited)
2015
(Unaudited)
2016
(Unaudited)
2015
(Unaudited)
Oil and Gas Revenues
$ 7,822,543 $ 8,629,007 $ 21,019,540 $ 23,651,449891
     
Cost and Operating Expenses
   
     Oil and gas production costs 2,329,228 2,917,296 7,019,771 6,991,148
     Oil and gas production taxes 389,029 410,347 1,032,335 1,110,262
     Depreciation, depletion and amortization 2,568,153 4,668,353 8,541,981 11,527,684
     Ceiling test impairment 9,648,942 56,513,016
     Accretion expense 125,813 103,887 360,167 250,266
     General and administrative expense 1,882,579 2,002,638 6,023,038 5,775,355
     
     Total Costs and Operating Expenses 16,943,744 10,102,521 79,490,308 25,654,715
         
     Income (Loss) from Operations (9,121,201) 1,473,514 (58,470,768) (2,003,217)
     
Other Income    
     Interest expense (95,864) (350,737) (597,910) (429,742)
     Interest income 6,417 1,831 83,470 2,613
     
     Net Other Income (89,447) (348,906) (514,440) (427,129)
     
     Income (Loss) Before Provision for Income Taxes (9,210,648) 1,822,420 (58,985,208) (2,430,346)
     
(Provision For) Benefit From Income Taxes 3,266,511 (684,152) 21,824,527 850,621
     
Net Income (Loss) ($ 5,944,137) $ 1,138,268 ($ 37,160,681) ($ 1,579,725)
     
Basic Earnings (Loss) Per Common Share ($0.14) $0.04 ($1.00) ($0.06)
Diluted Earnings (Loss) Per Common Share ($0.14) $0.04 ($1.00) ($0.06)
         
Basic Weighted-Average Common Shares Outstanding 41,917,061 30,372,701 36,996,932 27,430,624
Diluted Weighted-Average Common Shares Outstanding 41,917,061 30,372,701 36,996,932 27,430,624

RING ENERGY, INC.
COMPARATIVE OPERATING STATISTICS
    Three Months Ended September 30,
    2016
2015
Change
Net Production - BOE per day
  2,315 2,269 2%
Per BOE:    
     Average Sales Price   $ 36.73 $ 41.34 -11%
             
     Lease Operating Expenses   $ 10.94 $ 13.98 -22%
     Production Taxes   $ 1.83 $ 1.96 -7%
     DD&A   $ 12.06 $ 22.36 -46%
     Accretion   $ 0.59 $ 0.50 18%
     General and Administrative Expenses   $ 8.84 $ 9.59 -8%
    Nine Months Ended September 30,
    2016 2015 Change
Net Production - BOE per day   2,342 1,944 20%
Per BOE:        
     Average Sales Price   $ 32.76 $ 44.57 -26%
         
     Lease Operating Expenses   $ 10.94 $ 13.18 -17%
     Production Taxes   $ 1.61 $ 2.09 -23%
     DD&A   $ 13.31 $ 21.73 -39%
     Accretion   $ 0.56 $ 0.47 19%
     General and Administrative Expenses   $ 9.39 $ 10.88 -14%

RING ENERGY, INC.
CONSOLIDATED BALANCE SHEET
September 30,
2016
December 31,
2015
ASSETS
   
Current Assets
   
     Cash $ 2,249,007 $ 4,431,350
     Accounts receivable 2,965,320 2,507,858
     Joint interest billing receivable 611,236 1,629,165
     Prepaid expenses and retainers 330,600 146,118
     Total Current Assets 6,156,163 8,714,491
Property and Equipment, Using Full Cost Accounting    
     Oil and Gas properties subject to amortization 235,671,313 269,590,374
     Office equipment and automobiles 1,549,311 1,539,991
        Total Property and Equipment 237,220,624 271,130,365
     Accumulated depreciation, depletion and amortization (38,405,819) (29,863,838)
     Net Property and Equipment 198,814,805 241,266,527
Deferred Income Taxes 21,888,849 64,323
Deferred Financing Costs 473,696 820,904
Total Assets $ 227,333,513 $ 250,866,245
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities    
     Accounts payable $ 7,435,554 $ 11,023,269
     Other accrued liabilities 309,898
     Total Current Liabilities 7,435,554 11,333,167
     
     Long term debt 45,900,000
     Asset retirement obligation 8,002,787 7,401,950
     Total Liabilites 15,438,341 64,635,117
     
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;
   
     41,917,061 shares and 30,391,942 shares
     outstanding, respectively
41,917 30,392
     Additional paid-in capital 256,082,234 193,269,034
     Retained Loss (44,228,979) (7,068,298)
     Total Stockholders' Equity 211,895,172 186,231,128
Total Liabilities and Stockholders' Equity $ 227,333,513 $ 250,866,245

RING ENERGY, INC.
STATEMENTS OF CASH FLOW
   
  Nine Months Ended
September 30,
 
2016
2015
Cash Flows From Operating Activities
   
     Net Loss ($ 37,160,681) ($ 1,579,725)
     Adjustments to reconcile net loss to net cash
     used in operating activities:
   
       Depreciation, depletion and amortization 8,541,981 11,527,684
       Ceiling test impairment 56,513,016
       Accretion expense 360,167 250,266
       Shared-based compensation 1,647,554 1,962,142
       Deferred income tax benefit (21,824,526) (850,621)
       Changes in assets and liabilities:    
       Accounts receivable 560,467 916,843
       Prepaid expenses 162,726 (904,052)
       Accounts payable (3,897,613) (8,737,901)
Net Cash Provided by (Used in) Operating Activities 4,903,091 2,584,636
Cash Flows from Investing Activities    
     Payments to purchase oil and natural gas properties (6,154,997) (77,191,925)
     Payments to develop oil and natural gas properties (16,190,471) (21,449,757)
     Purchase of equipment, vehicles and leasehold improvements (9,320) (330,182)
     Plugging and abandonment cost incurred (7,817) (186,626)
     Net Cash Used in Investing Activities (22,362,605) (99,158,490)
Cash Flows from Financing Activities    
     Proceeds from issuance of common stock 61,064,871 50,039,853
     Proceeds from issuance of notes payable 5,000,000 40,900,000
     Principal payments on revolving line of credit (50,900,000)
     Proceeds from option exercise 112,500 130,000
Net Cash Provided by Financing Activities 15,277,171 91,069,853
Net Decrease in Cash (2,182,343) (5,504,001)
Cash at Beginning of Period 4,431,350 8,622,235
Cash at End of Period $ 2,249,007 $ 3,118,234
     
Supplemental Cash Flow Information    
     Cash paid for interest $ 564,640 $ 174,410
     
Non-Cash Investing and Financing Activities    
     Asset retirement obligation acquired $ 2,177,110
     Asset retirement obligation incurred during development 248,487 124,375
     
RECONCILIATION OF CASH FLOW FROM OPERATIONS
Net cash provided by operating activities $ 4,903,091 $ 2,584,636
Change in operating assets and liabilities 3,174,420 8,725,110
     
Cash flow from operations $ 8,077,511 $ 11,309,746
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
 
  Nine Months Ended
 
September 30,
2016
September 30,
2015
NET INCOME
($ 37,160,681) ($ 1,579,725)
     
     Interest (income) (83,470) (2,613)
     Interest expense 597,910 429,742
     Interest tax expense (benefit) (21,824,527) (850,621)
     Depreciation, depletion and amortization 8,541,981 11,527,684
     Accretion of discounted liabilities 360,167 250,266
     Ceiling test impairment 56,513,016
     Shared-based compensation 1,647,554 1,962,142
     
ADJUSTED EBITDA $ 8,591,950 $ 11,736,875


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, KM Financial, Inc.
(702) 489-4447 office


 
  December 9, 2016

RING ENERGY, INC. ANNOUNCES COMPLETION OF PUBLIC OFFERING OF COMMON STOCK
 
  December 6, 2016

RING ENERGY, INC. ANNOUNCES PRICING OF
PUBLIC OFFERING OF COMMON STOCK
 
  December 5, 2016

RING ENERGY, INC. ANNOUNCES
COMMON STOCK OFFERING
 
  December 1, 2016

RING ENERGY INC. RELEASES UPDATE ON THREE WELL HORIZONTAL DRILLING PROGRAM
Management Announces Preliminary Capital Expenditure Budget (“CAPEX”) for 2017
 
  November 8, 2016

RING ENERGY INC. ANNOUNCES THIRD QUARTER AND NINE MONTH 2016 FINANCIAL AND OPERATING RESULTS
 
  November 2, 2016

RING ENERGY, INC., SCHEDULES CONFERENCE CALL ON ITS 2016 THIRD QUARTER AND NINE MONTH FINANCIAL AND OPERATING RESULTS
 
  November 1, 2016

RING ENERGY, INC. RELEASES THIRD QUARTER 2016 OPERATIONS UPDATE
 
  September 22, 2016

RING ENERGY INC. RELEASES PRELIMINARY UPDATE ON THREE WELL HORIZONTAL
DRILLING PROGRAM
Company Doubles Net Acreage Related To Horizontal Development Program In Central Basin Platform
 
  August 8, 2016

RING ENERGY, INC. SCHEDULES CONFERENCE CALL ON ITS 2016 SECOND QUARTER AND SIX MONTH FINANCIAL AND OPERATING RESULTS
 
  July 27, 2016

RING ENERGY, INC. SCHEDULES CONFERENCE CALL ON ITS 2016 SECOND QUARTER AND SIX MONTH FINANCIAL AND OPERATING RESULTS
 
  July 14, 2016

RING ENERGY, INC. ANNOUNCES SECOND QUARTER 2016 OPERATIONS UPDATE
 
  May 9, 2016

RING ENERGY ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR FIRST QUARTER 2016
 
  May 5, 2016

RING ENERGY, INC. ANNOUNCES CAPITAL EXPENDITURE BUDGET OF AN ESTIMATED $23 MILLION FOR REMAINDER OF 2016
 
  May 3, 2016

RING ENERGY, INC. SCHEDULES CONFERENCE CALL ON ITS 2016 1ST QUARTER FINANCIAL
AND OPERATING RESULTS
 
  April 26, 2016

RING ENERGY, INC. ANNOUNCES EXERCISE IN FULL OF OVER-ALLOTMENT OPTION AND COMPLETION OF PUBLIC OFFERING OF
COMMON STOCK
 
  April 21, 2016

RING ENERGY, INC. ANNOUNCES PRICING OF
PUBLIC OFFERING OF COMMON STOCK
 
  April 20, 2016

RING ENERGY, INC. ANNOUNCES
COMMON STOCK OFFERING
 
  April 13, 2016

RING ENERGY, INC. ANNOUNCES FIRST
QUARTER 2016 OPERATIONS UPDATE
 
  March 15, 2016

RING ENERGY ANNOUNCES FINANCIAL AND OPERATIONAL RESULTS FOR FOURTH QUARTER AND YEAR END 2015
 
  March 2, 2016

RING ENERGY, INC. SCHEDULES CONFERENCE CALL ON ITS 2015 4TH QUARTER AND YEAR END FINANCIAL AND OPERATING RESULTS
 
  January 11, 2016

RING ENERGY, INC. ANNOUNCES FOURTH QUARTER AND YEAR END 2015 OPERATIONS UPDATE
 
 
 

 
   
   

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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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