Ring Energy Announces Financial Results for First Quarter 2015
MIDLAND, Texas--(BUSINESS WIRE)-- 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.
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.
| RING ENERGY, INC. | ||||||||||||||
| STATEMENTS OF OPERATIONS | ||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31, | ||||||||||||||
| 2015 | 2014 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| Oil and Gas Revenues | $ | 6,045,701 | $ | 5,970,452 | ||||||||||
| Costs 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 | ||||||||||||
| 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 & Administrative Expenses | 12.31 | 23.93 | -49 | % | |||||||||
| RING ENERGY, INC. | |||||||||||||||
| CONSOLIDATED BALANCE SHEET | |||||||||||||||
| March 31, | December 31, | ||||||||||||||
| 2015 | 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 natural 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 Liabilities | 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, | ||||||||||||||
| 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 | ||||||||||||
| Share-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 | ||||||||||
| Noncash 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 | ||||||||||
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| 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 | ||||||||||||
| March 31, | March 31, | |||||||||||
| 2015 | 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 | ||||||||
K M Financial, Inc.
Bill Parsons, 702-489-4447
Source: Ring Energy, Inc.
Released May 6, 2015