Press Release
  

FOR IMMEDIATE RELEASE
May 9, 2017 NYSE MKT: REI

RING ENERGY, INC. ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR FIRST QUARTER 2017

Midland, TX. May 9, 2017 – Ring Energy, Inc. (NYSE MKT: REI) (“Ring”)(“Company”) announced today financial results for the first quarter ended March 31, 2017. For the three month period ended March 31, 2017, Ring had oil and gas revenues of $12,243,793 compared to $6,092,388 for the quarter ended March 31, 2016, and net income of $1,696,141, or $0.03 per diluted share, compared to a net loss of $15,275,044, or $0.50 per diluted share, which included a pre-tax non-cash impairment of $21,412,086 for the same period in 2016. Excluding the after tax impact of the impairment, the net loss per diluted share for the three month period ended March 31, 2016 would have been $0.06.

For the three months ended March 31, 2017, oil sales volume increased to 240,260 barrels, compared to 191,377 barrels for the same period in 2016, an 26% increase, and gas sales volume decreased to 168,349 MCF (thousand cubic feet), compared to 256,748 MCF for the same period in 2016, a 34% decrease. On a barrel of oil equivalent (“BOE”) basis for the three months ended March 31, 2017, production sales increased to 268,318 BOEs, compared to 234,168 BOEs for the same period in 2016, a 15% increase. The average commodity prices received by Ring were $48.69 per barrel of oil and $3.25 per MCF of natural gas for the quarter ended March 31, 2017, compared to $29.20 per barrel of oil and $1.97 per MCF of natural gas for the quarter ended March 31, 2016.

Lease operating expenses, including production taxes, for the three months ended March 31, 2017 were $12.26 per BOE, a 3% increase from the prior year. Depreciation, depletion and amortization costs, including accretion, decreased 10% to $13.46 per BOE. General and administrative costs, which included a $991,210 charge for stock based compensation, were $10.59 per BOE, a 12% increase.

Cash provided by operating activities, before changes in working capital, for the three months ended March 31, 2017 was $7,221,936 or $0.14 per fully diluted share, compared to $1,254,315, or $0.04 per fully diluted share for the same period in 2016. Earnings before interest, taxes, depletion and other non-cash items (“Adjusted EBITDA”) for the three months ended March 31, 2017 was $7,105,257, or $0.14 per fully diluted share, compared to $1,666,936, or $0.05 per fully diluted share for the same period in 2016.
(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 March 31, 2017.

Ring’s Chief Executive Officer, Mr. Kelly Hoffman, stated, “2017 is off to a fast start. With the promising initial results from the first ten horizontal wells we drilled on our Central Basin Platform (“CBP”) property, our enthusiasm has only increased. Our staff has amassed a premiere acreage portfolio in what is arguably one of the best locations in the country. With the acquisition of the 33,000 acres in Gaines County completed, we now have over 600 net potential drilling locations. We continue to look for opportunities that complement our core assets. We are excited and expect this year to be an extraordinary time for the Company.”

Non-GAAP Financial Measures:

Net income for the three months ended March 31, 2017 includes a non-cash charge for stock based compensation of $991,210. Excluding this item, the Company’s net income would have been $0.05 per diluted share for the three months ended March 31, 2017. The Company believes results excluding this item 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
March 31,
   
2017
(Unaudited)
2016
(Unaudited)
Oil and Gas Revenues
    $ 12,243,793 $ 6,045,388
         
Cost and Operating Expenses
     
     Oil and gas production costs     2,705,371 2,490,434
     Oil and gas production taxes     583,264 299,271
     Depreciation, depletion and amortization     3,474,019 3,394,627
     Ceiling test impairment     21,412,086
     Asset retirement obligation accretion     137,176 109,378
     General and administrative expense     2,841,111 2,220,072
       
     Total Costs and Operating Expenses     9,740,941 29,925,868
         
Gain (Loss) from Operations     2,502,852 (23,833,480)
       
Other Income (Loss)      
     Interest expense     2,887
     Interest income     116,679 (415,508)
       
     Net Other Income (Loss)     116,679 (412,621)
       
Income (Loss) Before Tax Provision     2,619,531 (24,246,101)
       
(Provision for) Benefit From Income Taxes     (1,340,250) 8,971,057
       
Net Income (Loss)     $1,279,281 ($15,275,044)
       
Basic Earnings (Loss) Per Common Share     $0.03 ($0.50)
Diluted Earnings (Loss) Per Common Share     $0.03 ($0.50)
       
Basic Weighted-Average Common Shares Outstanding     49,114,731 30,394,360
Diluted Weighted-Average Common Shares Outstanding     50,414,435 30,394,360
     

RING ENERGY, INC.
COMPARATIVE OPERATING STATISTICS
    Three Months Ended March 31,
    2017 2016 Change
Net Production - BOE per day
  2,981 2,573 16%
Per BOE:        
     Average Sales Price   $ 45.63 $ 26.02 75%
             
     Lease Operating Expenses   10.08 10.63 -5%
     Production Taxes   2.17 1.28 70%
     DD&A   12.95 14.50 -11%
     Accretion   0.51 0.47 -9%
     General and Administrative Expenses   10.59 9.48 12%

RING ENERGY, INC.
CONSOLIDATED BALANCE SHEET
 
March 31,
2017
December 31,
2016
ASSETS
   
Current Assets
   
     Cash $ 55,418,128 $ 71,086,381
     Accounts receivable 4,756,301 3,453,236
     Joint interest billing receivable 271,345 454,461
     Prepaid expenses and retainers 132,813 226,835
     Total Current Assets 60,578,587 75,220,915
Properties and Equipment    
     Oil and Natural Gas properties subject to amortization 279,486,903 250,133,965
     Inventory for property development 3,711,149 1,582,427
     Fixed assets subject to depreciation 1,549,311 1,549,311
        Total Property and Equipment 284,747,363 253,265,703
        Accumulated depreciation, depletion and amortization (44,821,171) (41,347,152)
        Net Property and Equipment 239,926,192 211,918,551
Deferred Income Taxes 20,308,121 20,051,908
Deferred Financing Costs 338,354 406,025
Total Assets $ 321,151,254 $307,597,399
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities    
     Accounts payable $ 18,561,210 $ 9,099,391
     Total Current Liabilities 18,561,210 9,099,391
     
     Asset retirement obligations 8,329,654 7,957,035
     Total Liabilites 26,890,864 17,056,426
     
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
   
     49,116,554 shares and 49,113,063 shares
     outstanding, respectively
49,116 49,113
     Additional paid-in capital 336,041,515 335,197,845
     Retained Loss (41,830,241) (44,705,985)
     Total Stockholders' Equity 294,260,390 290,540,973
Total Liabilities and Stockholders' Equity $ 321,151,254 $ 307,597,399
     

RING ENERGY, INC.
STATEMENTS OF CASH FLOW
   
  Three Months Ended
March 31
 
2017
2016
Cash Flows From Operating Activities
   
     Net Income (loss) $ 1,279,281 ($15,275,044)
     Adjustments to reconcile net income to net cash used in operating activities:    
       Depreciation, depletion and amortization 3,474,019 3,394,627
       Ceiling test impairment 21,412,086
       Accretion expense 137,176 109,378
       Shared-based compensation 991,210 584,325
       Deferred income tax provision (benefit) 923,390 (8,971,057)
       Excess tax benefits related to shared-based compensation 416,860
     Changes in assets and liabilities:    
       Accounts receivable (1,119,947) 904,886
       Prepaid expenses 161,693 187,298
       Accounts payable 4,761,819 (4,086,181)
       Settlement of asset retirement obligation (8,929) (1,344)
Net Cash Provided by (Used in) Operating Activities 11,016,572 (1,739,682)
Cash Flows from Investing Activities    
     Payments to purchase oil and natural gas properties (3,924,404) (643,116)
     Payments to develop oil and natural gas properties (19,796,719) (3,258,542)
     Purchase of inventory for development (2,816,165)
     Net Cash Used in Investing Activities (26,537,288) (3,903,002)
Cash Flows from Financing Activities    
     Amounts paid for registration statement for future offerings (147,537)
     Proceeds from issuance of notes payable 5,000,000
     Proceeds from option exercise 22,500
Net Cash Provided by Financing Activities (147,537) 5,022,500
Net Decrease in Cash (15,668,253) (620,184)
Cash at Beginning of Period 71,086,381 4,431,350
Cash at End of Period $ 55,418,128 ($ 3,811,166)
     
Supplemental Cash Flow Information    
     Cash paid for interest $352,662
     
Non-Cash Investing and Financing Activities    
     Asset retirement obligation incurred during development $ 244,372 $ 39,247
     Use of inventory in property development $ 687,443
     Capitalized expenditures attributable to drilling projects
     financed through current liabilities
$4,700,000
     
RECONCILIATION OF CASH FLOW FROM OPERATIONS
Net cash provided by operating activities $11,016,572 ($1,741,026)
Change in operating assets and liabilities (3,794,636) 2,995,341
     
Cash flow from operations $ 7,221,936 $ 1,254,315
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,
2017
March 31,
2016
NET INCOME (LOSS)
$ 1,279,281 ($15,275,044)
     
     Interest (Income) (116,679) (2,887)
     Interest expense 415,508
     Interest tax expense (benefit) 923,390 (8,971,057)
     Excess tax benefits related to shared-based compensation 416,860
     Depreciation, depletion and amortization 3,474,019 3,394,627
     Accretion of discounted liabilities 137,176 109,378
     Ceiling test impairment 21,412,086
     Shared-based compensation 991,210 584,325
     
ADJUSTED EBITDA $ 7,105,257 $ 1,666,936
     


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, 2016 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


 
  May 8, 2017

RING ENERGY, INC., ANNOUNCES FINANCIAL
AND OPERATING RESULTS FOR FIRST
QUARTER 2017
 
  May 3, 2017

RING ENERGY, INC., SCHEDULES CONFERENCE CALL ON ITS 2017 FIRST QUARTER FINANCIAL AND OPERATING RESULTS
 
  April 17, 2017

RING ENERGY, INC. ACQUIRES OVER 33,000 ACRES IN CENTRAL BASIN PLATFORM
 
  April 5, 2017

RING ENERGY, INC. RELEASES FIRST QUARTER 2017 OPERATIONS UPDATE
 
  March 15, 2017

RING ENERGY, INC ANNOUNCES FINANCIAL AND OPERATIONAL RESULTS FOR FOURTH QUARTER AND YEAR END 2016
 
  February 23, 2017

RING ENERGY, INC., SCHEDULES CONFERENCE CALL ON ITS 2016 FOURTH QUARTER AND TWELVE MONTH FINANCIAL AND OPERATING RESULTS
 
  December 9, 2017

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

 
   
   

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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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