Ring Energy REI
Ring Energy reports $16.6 million net loss for Q3 2026
- Form
- 10-Q
- Filed
- Importance
- Notable
- Accession
- 0001384195-26-000086
- Revenue of $102.34 million for the three months ended Sep 30, 2026
- Net loss of $16.6 million for the three months ended Sep 30, 2026
- Diluted EPS of -$0.06 for the three months ended Sep 30, 2026
- Cash and equivalents of $1.47 million as of Sep 30, 2026
Written from the 10-Q on EDGAR. AI can make mistakes. Check the filing.
What changed
16 changes since the June 2026 10-Q
Compared with the 10-Q 0001384195-26-000080, filed Aug 5, 2026.
New legal mention
Except as set forth in "Note 12 — Commitments and Contingencies" in "Part I, Item 1.
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Now
Except as set forth in "Note 12 — Commitments and Contingencies" in "Part I, Item 1.New legal mention
Legal Proceedings – In July 2021, a lawsuit was filed in Harris County District Court, Houston, Texas, styled EPUS Permian Assets, LLC, v. Ring Energy, Inc. The plaintiff asserted breach of contract, money had and…
From the filings
Now
Legal Proceedings – In July 2021, a lawsuit was filed in Harris County District Court, Houston, Texas, styled EPUS Permian Assets, LLC, v. Ring Energy, Inc. The plaintiff asserted breach of contract, money had and received by fraudulent inducement, unjust enrichment and constructive trust and requested its forfeited deposit of $ 5.5 million plus related damages, and attorneys' fees and costs.New legal mention
On September 23, 2026, following a jury trial, the court returned a verdict in favor of the Company on all of the plaintiff's claims.
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Now
On September 23, 2026, following a jury trial, the court returned a verdict in favor of the Company on all of the plaintiff's claims.New legal mention
The plaintiff may appeal and the matter will not be final until any appeal is resolved.
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The plaintiff may appeal and the matter will not be final until any appeal is resolved.Net income down 126% from Jun 30
−$16.6M, was $64.8M.
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Before
$64.8MNow
−$16.6MEPS down 122% from Jun 30
−$0.06, was $0.27.
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$0.27Now
−$0.06Cash up 30% from Jun 30
$1.5M, was $1.1M.
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$1.1MNow
$1.5MRevenue down 2.2% from Jun 30
$102M, was $105M.
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$105MNow
$102MDuring the third quarter of 2026, the Company drilled a total of eight and completed a total of seven…
Adds "third"; drops "second".
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During the second quarter of 2026, the Company drilled a total of seven wells and completed a total of four wells. Specifically, in the Northwest Shelf the Company drilled and completed one 1.5-mile horizontal well and one 1-mile horizontal well in Yoakum County, with a working interest of approximately 98% and 100%, respectively. In the Central Basin Platform, the Company drilled and completed one 1.5-mile horizontal well in Andrews County with a working interest of approximately 99%, and one 1.5-mile horizontal well in Crane County with a working interest of of approximately 96%. The latter of these two wells, while completed, was not put on pump until the third quarter of 2026 and did not contribute significant volumes in the second quarter of 2026. Also in Crane County, the Company drilled three 2-mile horizontal wells, each with a working interest of 100%, and was in the process of drilling one SWD well. The three 2-mile horizontal wells represent the first laterals of this length drilled by the Company in an area that has been historically developed with vertical wells. All four of these wells are to be completed during the third quarter of 2026.Now
During the third quarter of 2026, the Company drilled a total of eight and completed a total of seven horizontal producing wells. Additionally, the Company completed the SWD well that was in the process of being drilled at the end of the second quarter. In the Central Basin Platform in Andrews County, the Company drilled and completed two 1.5-mile horizontal wells, both with a working interest of approximately 99%. In the Central Basin Platform in Crane County, the Company drilled six and completed five 2-mile horizontal wells, each with a working interest of 100%.(2) The total does not include the SWD well that was completed in the third quarter of 2026.
Adds "(2)"; drops "(1) The horizontal well completed in the Central Basin Platform in the first quarter of…".
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(1) The horizontal well completed in the Central Basin Platform in the first quarter of 2026 is the completion of a previously drilled but uncompleted ("DUC") well. (1) Total does not include the SWD well(s) drilled and completed in the [ ].Now
(2) The total does not include the SWD well that was completed in the third quarter of 2026.During the third quarter of 2026, the Company benefited from higher realized oil prices compared with the…
Adds "third"; drops "second".
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During the second quarter of 2026, crude oil prices increased meaningfully relative to the levels when a significant portion of the Company's hedge portfolio was established. As a result, while the Company benefited from higher oil prices, realized settlements on crude oil derivative contracts reduced realized pricing and cash flow relative to unhedged market prices. During the quarter, the Company recognized realized losses on crude oil derivative contracts of approximately $19.6 million.Now
During the third quarter of 2026, the Company benefited from higher realized oil prices compared with the prior year period. However, realized settlements on crude oil derivative contracts partially offset the benefit of higher oil prices, resulting in realized losses of approximately $12.3 million during the quarter. The Company's commodity derivative portfolio is designed to reduce exposure to commodity price volatility, support cash flow and liquidity, and satisfy applicable hedging requirements under its Credit Facility.Natural gas prices in the Permian Basin remained challenged during the quarter due in part to regional…
Adds "Natural gas prices in"; drops "evaluate".
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The Company continues to evaluate its commodity price risk management strategy and hedge profile in light of requirements under the Credit Facility, market conditions, balance sheet strength, capital allocation priorities, and anticipated commodity price exposure.Now
Natural gas prices in the Permian Basin remained challenged during the quarter due in part to regional transportation, processing and takeaway constraints, which adversely affected the Company's realized natural gas prices. The Company continues to monitor commodity market conditions and its commodity price risk management strategy in light of anticipated production, capital allocation priorities, balance sheet considerations and requirements under the Credit Facility.The Company performs a ceiling test at the end of each reporting period to evaluate its oil and natural gas…
Adds "The Company performs"; drops "We perform".
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We perform a ceiling test at the end of each reporting period to evaluate for potential non-cash impairments. Under the full cost method of accounting, the net book value of properties, less related deferred income taxes, may not exceed a calculated "ceiling," which is defined as the estimated after-tax future net revenues from proved oil and natural gas properties, discounted at an annual rate of 10%. The discounted future net revenues are estimated using spot prices for oil and natural gas, based on the average price during the preceding twelve months. This average is calculated as an unweighted arithmetic mean of the first-day-of-the-month prices for each month within that period, except when changes are fixed and determinable by existing contracts.Now
The Company performs a ceiling test at the end of each reporting period to evaluate its oil and natural gas properties for potential non-cash impairment under the full cost method of accounting. The ceiling test is based on estimated future net revenues from proved reserves using the applicable twelve-month average commodity prices, discounted at an annual rate of 10% and is affected by changes in commodity prices, operating costs, reserve estimates, reserve additions and tax attributes.Operating lease expense . Our operating lease expense costs decreased $50,904 from $175,091 to $124,187 due…
New paragraph in MD&A.
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Operating lease expense . Our operating lease expense costs decreased $50,904 from $175,091 to $124,187 due to the Woodlands expansion space lease being combined with the total Woodlands office lease.Asset retirement obligation ("ARO") accretion $ 1,203,169 $ 1,099,363 $ 103,806 9 %
New paragraph in MD&A.
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Asset retirement obligation ("ARO") accretion $ 1,203,169 $ 1,099,363 $ 103,806 9 %Gain (loss) on disposal of assets $ 52,331 $ 105,642 $ (53,311) (50) % (1) Not meaningful.
Adds "disposal of assets"; drops "Total".
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Total gain (loss) on derivative contracts: $ 23,724,426 $ 14,648,054 $ 9,076,372 62 %Now
Gain (loss) on disposal of assets $ 52,331 $ 105,642 $ (53,311) (50) % (1) Not meaningful.
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Section by section. Added words and removed words against the earlier filing.
Cover page 2 changes
3 unchanged paragraphs
For the quarterly period ended June September 30, 2026
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As of August November 5, 2026, the registrant had outstanding 260,539,607 shares of common stock ($0.001 par value).
1 unchanged paragraph
Forward-looking statements 1 change
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• management's ability to execute our operating and strategic plans; to meet our optimal goals;
13 unchanged paragraphs
Condensed Financial Statements 178 changes
2 unchanged paragraphs
Accounts receivable 43,460,514 30,938,908
Derivative assets 6,335,601 21,468,134
Inventory 5,626,261 5,312,715
June September 30, 2026 December 31, 2025
Cash and cash equivalents $ 1,137,410 1,473,639 $ 902,913
Accounts receivable 49,387,082 30,938,908
Joint interest billing receivables, net 1,083,368 1,327,039 1,623,991
Derivative assets 7,115,775 21,468,134
Inventory 6,068,196 5,312,715
Prepaid expenses and other assets 3,195,806 2,526,316 1,822,751
Total Current Assets 60,838,960 67,898,047 62,069,412
1 unchanged paragraph
Derivative assets 10,154,821 9,739,430
Oil and natural gas properties, full cost method 1,804,582,372 1,855,601,600 1,891,510,431
Financing lease asset subject to depreciation 3,687,531 3,677,613 3,633,586
Fixed assets subject to depreciation 3,389,403 3,404,826 3,504,788
Total Properties and Equipment 1,811,659,306 1,862,684,039 1,898,648,805
Accumulated depreciation, depletion and amortization ( 610,047,201 629,969,873 ) ( 569,180,901 )
Net Properties and Equipment 1,201,612,105 1,232,714,166 1,329,467,904
Operating lease asset 963,396 850,696 1,285,159
Derivative assets 8,955,873 9,739,430
Deferred financing costs 7,987,814 7,314,084 9,337,344
Total Assets $ 1,281,557,096 1,317,732,866 $ 1,411,899,249
1 unchanged paragraph
Accounts payable $ 98,068,202 $ 90,258,731
Derivative liabilities 11,373,096 841,193
Accounts payable $ 117,296,494 $ 90,258,731
Income tax liability 514,966 390,507 356,436
Financing lease liability 693,432 646,731 730,564
Operating lease liability 491,796 498,844 586,614
Derivative liabilities 44,004,900 841,193
Notes payable 1,496,304 1,006,152 505,752
1 unchanged paragraph
Total Current Liabilities 112,929,640 164,135,472 93,697,816
1 unchanged paragraph
Derivative liabilities 12,035,055 2,512,692
Total Liabilities 528,133,334 569,894,007
Deferred income taxes 11,243,098 12,755,515 22,298,701
Revolving line of credit 360,000,000 350,000,000 420,000,000
Financing lease liability, less current portion 533,212 439,869 593,146
Operating lease liability, less current portion 569,328 442,008 819,223
Derivative liabilities 20,007,162 2,512,692
Asset retirement obligations 30,823,001 30,632,348 29,972,429
Total Liabilities 578,412,374 569,894,007
3 unchanged paragraphs
Common stock - $ 0.001 par value; 450,000,000 shares authorized; 260,520,291 260,539,607 shares and 207,656,929 shares issued and outstanding, respectively
Additional paid-in capital 879,941,415 882,438,355 812,777,586
Retained earnings (Accumulated deficit) ( 126,778,173 143,378,402 ) 29,019,999
Total Stockholders' Equity 753,423,762 739,320,492 842,005,242
Total Liabilities and Stockholders' Equity $ 1,281,557,096 1,317,732,866 $ 1,411,899,249
2 unchanged paragraphs
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 104,681,489 $ 82,602,759 $ 178,353,153 $ 161,693,966
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 102,343,662 $ 78,601,336 $ 280,696,815 $ 240,295,302
1 unchanged paragraph
Lease operating expenses 18,409,462 20,245,981 36,531,806 39,923,533
Gathering, transportation and processing costs 101,902 133,809 218,951 337,421
Ad valorem taxes 2,202,160 1,648,647 4,404,697 3,180,755
Oil and natural gas production taxes 5,047,619 3,832,607 8,601,510 7,417,062
Depreciation, depletion and amortization 20,114,890 25,569,914 41,520,838 48,185,897
Asset retirement obligation accretion 401,944 382,251 797,440 708,800
Operating lease expense 175,090 175,090 350,181 350,181
General and administrative expense 7,954,230 7,138,519 15,393,008 15,758,495
Total Costs and Operating Expenses 54,407,297 59,126,818 269,904,688 115,862,144
Income (Loss) from Operations 50,274,192 23,475,941 ( 91,551,535 ) 45,831,822
Lease operating expenses 19,367,227 20,518,472 55,899,033 60,442,005
Gathering, transportation and processing costs 180,787 126,569 399,738 463,990
Ad valorem taxes 2,210,911 2,446,565 6,615,608 5,627,320
Oil and natural gas production taxes 4,584,698 3,670,987 13,186,208 11,088,049
Depreciation, depletion and amortization 20,900,733 25,225,345 62,421,571 73,411,242
Ceiling test impairment — — 72,912,330 162,086,257 — 72,912,330
Asset retirement obligation accretion 405,729 390,563 1,203,169 1,099,363
Operating lease expense 124,187 175,091 474,368 525,272
General and administrative expense 9,046,598 8,139,771 24,439,606 23,898,266
Total Costs and Operating Expenses 56,820,870 133,605,693 326,725,558 249,467,837
Income (Loss) from Operations 45,522,792 ( 55,004,357 ) ( 46,028,743 ) ( 9,172,535 )
1 unchanged paragraph
Interest income 148,540 69,658 219,069 159,716
Interest (expense) ( 8,379,552 ) ( 11,757,404 ) ( 16,979,161 ) ( 21,256,190 )
Gain (loss) on derivative contracts 23,724,426 14,648,054 ( 58,506,499 ) 13,719,264
Gain (loss) on disposal of assets 104,150 155,293 104,150 279,903
Net Other Income (Expense) 15,607,164 3,266,371 ( 75,147,004 ) ( 6,937,595 )
Income (Loss) Before Benefit from (Provision for) Income Taxes 65,881,356 26,742,312 ( 166,698,539 ) 38,894,227
Benefit from (Provision for) Income Taxes ( 1,088,046 ) ( 6,107,425 ) 10,900,367 ( 9,148,602 )
Net Income (Loss) $ 64,793,310 $ 20,634,887 $ ( 155,798,172 ) $ 29,745,625
Basic Earnings (Loss) per Share $ 0.28 $ 0.10 $ ( 0.70 ) $ 0.15
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and 98 more changes in the filing
Note 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 89 changes
Condensed Financial Statements – The accompanying condensed financial statements prepared by Ring Energy, Inc., a Nevada corporation (the "Company," "Ring Energy," "Ring," "we," "us," or "our"), have not been audited by an independent registered public accounting firm. In the opinion of the Company's management, the accompanying unaudited condensed financial statements contain all adjustments necessary for fair presentation of the results of operations for the periods presented, which adjustments were of a normal recurring nature, except as disclosed herein. The condensed results of operations for the three and six nine months ended June September 30, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026, for various reasons, including the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, and other factors.
12 unchanged paragraphs
Cash and cash equivalents – The Company had cash in excess of federally insured limits of $ 887,410 1,223,639 and $ 652,913 as of June September 30, 2026 and December 31, 2025, respectively. The Company places its cash with a high credit quality financial institution. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.
Accounts receivable – Substantially all of the Company's accounts receivable is from purchasers of oil and natural gas. Oil and natural gas sales are generally unsecured. Accounts receivable from purchasers outstanding longer than the contractual payment terms are considered past due. The Company has not had any significant credit losses in the past and believes its accounts receivable are materially collectable. During the six nine months ended June September 30, 2026, sales to three purchasers represented 72 %, 13 11 % and 11 %, respectively, of total oil, natural gas, and natural gas liquids sales. As of June September 30, 2026, receivables outstanding from these three purchasers represented 72 82 %, 13 0 % and 9 8 %, respectively, of accounts receivable.
The following table reflects the Company's beginning and ending balances of its accounts receivables from purchasers of its oil and gas for the three and six nine months ended June September 30, 2026 and June September 30, 2025.
1 unchanged paragraph
June September 30, 2026 June September 30, 2025
Ending Beginning balance of accounts receivable from purchasers of oil and gas $ 41,907,240 $ 36,251,914
Beginning Ending balance of accounts receivable from purchasers of oil and gas $ 43,249,561 $ 35,111,264 48,168,956 32,354,972
For the Six Nine Months Ended
June September 30, 2026 June September 30, 2025
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Ending balance of accounts receivable from purchasers of oil and gas 41,907,240 36,251,914 48,168,956 32,354,972
The following table indicates the Company's provisions for credit loss expense associated with its accounts receivable from purchasers of its oil and gas ("O&G") during the three and six nine months ended June September 30, 2026 and June September 30, 2025.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Credit loss expense, O&G $ 92,432 — $ — $ 92,432 $ —
The following table reflects the Company's accounts receivable from purchasers of its oil and gas and allowance for credit losses as of June September 30, 2026 and December 31, 2025.
June September 30, 2026 December 31, 2025
Accounts receivable from purchasers of oil and gas $ 41,999,672 48,261,388 $ 29,591,571
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Credit loss expense, JIB $ — $ 205 $ — $ 18,122
Accounts receivable from purchasers of oil and gas, net $ 41,907,240 48,168,956 $ 29,591,571
Joint interest billing receivables, net – The Company also has joint interest billing ("JIB") receivables. Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. Receivables from joint interest owners outstanding longer than the contractual payment terms are considered past due. The following table indicates the Company's provisions for credit loss expense associated with its joint interest billing receivables during the three and six nine months ended June September 30, 2026 and June September 30, 2025.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Credit loss expense, JIB $ 50,871 $ 907 $ 50,871 $ 19,029
The following table reflects the Company's joint interest billing receivables and allowance for credit losses as of June September 30, 2026 and December 31, 2025.
June September 30, 2026 December 31, 2025
Joint interest billing receivables $ 1,284,130 1,578,672 $ 1,824,753
Allowance for credit losses ( 200,762 251,633 ) ( 200,762 )
Joint interest billing receivables, net $ 1,083,368 1,327,039 $ 1,623,991
The increase of $ 50,871 in the allowance for credit losses during the nine months ended September 30, 2026 was primarily for owner billings considered uncollectible with no offsetting revenues held in suspense.
1 unchanged paragraph
Production imbalances – The Company accounts for natural gas production imbalances using the sales method, which recognizes revenue on all natural gas sold even though the natural gas volumes sold may be more or less than the Company's ownership entitles it to sell. Liabilities are recorded for imbalances greater than the Company's proportionate share of remaining estimated natural gas reserves. The Company recorded no imbalances as of June September 30, 2026 or December 31, 2025.
Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At June September 30, 2026 and December 31, 2025, the Company had no such investments.
3 unchanged paragraphs
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Depletion $ 19,846,120 $ 25,224,638 $ 40,971,496 $ 47,479,214
All capitalized costs of oil and natural gas properties, including the estimated future costs to develop proved reserves and estimated future costs to plug and abandon wells and costs of site restoration, less the estimated salvage value of equipment associated with the oil and natural gas properties, are amortized on the unit-of-production method using estimates of proved reserves as determined by independent petroleum engineers. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is offset to the capitalized costs to be amortized. The following table shows total depletion and the depletion per barrel-of-oil-equivalent rate, for the three and six nine months ended June September 30, 2026 and 2025.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Depletion $ 20,616,930 $ 24,902,199 $ 61,588,426 $ 72,381,413
Depletion rate, per barrel-of-oil-equivalent (Boe) $ 10.91 10.86 $ 13.02 $ 11.51 11.28 $ 13.21 13.15
5 unchanged paragraphs
Due to the lower oil prices impacting the present value of estimated future net revenues, during the six months ended June 30, 2026, the Company recorded impairments on oil and natural gas properties as a result of the ceiling test of $ 162,086,257 . The Company did not record an impairment on oil and natural gas properties during the three months ended June 30, 2026. No such impairments were recorded during the three and six months ended June 30, 2025.
Primarily as a result of lower oil prices incorporated into the twelve-month average prices used in the ceiling test calculation, the Company recorded a non-cash impairment of its oil and natural gas properties of $ 162,086,257 during the nine months ended September 30, 2026. No impairment was recorded during the three months ended September 30, 2026. During the three and nine months ended September 30, 2025, the Company recorded a non-cash ceiling test impairment of $ 72,912,330 .
6 unchanged paragraphs
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Depreciation $ 55,298 $ 106,658 $ 142,433 $ 203,278
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Sale of owned vehicles $ 81,008 $ 155,293 $ 81,008 $ 286,877
Gain (loss) on disposal of assets $ 104,150 $ 155,293 $ 104,150 $ 279,903
The following table provides information on the Company's depreciation expense for the three and six nine months ended June September 30, 2026 and 2025.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Depreciation $ 72,479 $ 105,933 $ 214,912 $ 309,211
During the three and six nine months ended June September 30, 2026 and 2025, the Company recorded a gain (loss) on disposal of assets, which was impacted by the sale of owned vehicles, as follows:
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Sale of leased owned vehicles 23,142 $ — $ — $ 23,142 $ ( 6,974 )
Sale of leased vehicles 52,331 105,642 133,339 392,519
Gain (loss) on disposal of assets $ 52,331 $ 105,642 $ 156,481 $ 385,545
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
As of June September 30, 2026 and December 31, 2025, the notes payable balances included in current liabilities on the Condensed Balance Sheets were $ 1,496,304 1,006,152 and $ 505,752 , respectively.
The following table reflects the weighted average notes payable balances and the weighted average interest rate on the weighted average notes payable outstanding during the period as of and for the three and six nine months ended June September 30, 2026 and 2025.
Three Months Ended Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Interest paid for notes payable $ 9,600 $ 10,645 $ 16,147 $ 17,166
Weighted average interest rate on weighted average notes payable 10.91 7.09 % 12.88 7.94 % 9.79 7.95 % 10.85 8.85 %
The following table shows interest paid related to notes payable for the three and six nine months ended June September 30, 2026 and 2025. This interest is included within "Interest (expense)" in the Condensed Statements of Operations.
Three Months Ended Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Interest paid for notes payable $ 23,172 $ 25,710 $ 39,319 $ 42,876
2 unchanged paragraphs
In assessing the Company's deferred tax assets, the Company considers whether a valuation allowance should be recorded for some or all of the deferred tax assets which may not be realized. During the three months ended March 31, 2026, the Company determined that certain existing deferred tax assets will not be offset by existing deferred tax liabilities as a result of the 80% limitation on the utilization net operating losses incurred after 2017. As of June September 30, 2026, the Company is in a three-year cumulative loss position mainly driven by the book impairment recognized in the first quarter of 2026. As a result, future forecasted pre-tax book income was not considered in assessing the valuation allowance. We also consider the reversal of deferred tax liabilities and available tax planning strategies. Based on our evaluation of the realizability of the related federal deferred tax assets in the current year, the Company recorded $ 16.3 23.2 million of valuation allowance as part of the estimated annual effective tax rate in the six nine months ended June September 30, 2026. As of December 31, 2025, the Company did not carry a valuation allowance against its federal and state deferred tax assets.
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June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Deferred federal income tax benefit (provision) $ ( 542,196 ) $ ( 5,776,325 ) $ 10,160,342 $ ( 8,592,403 )
Current state income tax (provision) ( 59,649 ) ( 147,461 ) ( 155,236 ) ( 283,854 )
Deferred state income tax benefit (provision) ( 486,201 ) ( 183,639 ) 895,261 ( 272,345 )
Benefit from (Provision for) Income Taxes $ ( 1,088,046 ) $ ( 6,107,425 ) $ 10,900,367 $ ( 9,148,602 )
Effective tax rate (1)
The Company recorded the following federal and state income tax benefits (provisions) for the three and six nine months ended June September 30, 2026 and 2025.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Deferred federal income tax benefit (provision) $ ( 1,571,208 ) $ 12,558,220 $ 8,589,134 $ 3,965,817
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and 9 more changes in the filing
Note 2: REVENUE RECOGNITION 9 changes
4 unchanged paragraphs
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Disaggregation of revenue – The following table presents revenues disaggregated by product for the three and six nine months ended June September 30, 2026 and 2025.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
1 unchanged paragraph
Oil $ 110,167,205 $ 82,778,476 $ 186,372,219 $ 159,283,526
Natural gas liquids 3,693,665 2,063,220 5,456,403 4,952,104
Oil $ 98,726,711 $ 78,884,753 $ 285,098,930 $ 238,168,279
Natural gas liquids 4,185,209 1,969,906 9,641,612 6,922,010
Total oil, natural gas, and natural gas liquids revenues $ 104,681,489 102,343,662 $ 82,602,759 78,601,336 $ 178,353,153 280,696,815 $ 161,693,966 240,295,302 (1) In the three and six nine months ended June September 30, 2026 and 2025, the Company experienced a net negative total gas revenue, due to lower gross realized sales prices per Mcf compared to the plant fees per Mcf.
Note 3: LEASES 35 changes
1 unchanged paragraph
The Company has month to month leases for office equipment and compressors used in its operations on which the Company has elected to apply ASU 2016-02 (i.e. to not capitalize). The office equipment and compressors are not subject to ASU 2016-02 capitalization based on the agreement and nature of use. These leases are for terms that are less than 12 months and the Company does not intend to continue to lease this equipment for more than 12 months. The lease costs associated with these leases are reflected in the short-term lease costs within Lease operating expenses, shown below.
1 unchanged paragraph
Future lease payments associated with these operating and financing leases as of June September 30, 2026 are as follows:
1 unchanged paragraph
Financing lease payments 435,932 581,242 274,736 27,508 — — 1,319,418
Operating lease payments $ 263,518 131,759 $ 460,497 $ 250,606 $ 149,628 $ — $ — $ 1,124,249 992,490
Financing lease payments 210,799 608,872 302,366 43,626 — — 1,165,663
1 unchanged paragraph
June September 30, 2026 December 31, 2025
5 unchanged paragraphs
Imputed interest 63,125 91,543
Imputed interest 92,774 105,289
June September 30, 2026 December 31, 2025
Operating lease liability, current portion $ 491,796 498,844 $ 586,614
Operating lease liability, non-current portion 569,328 442,008 819,223
Operating lease liability, total $ 1,061,124 940,852 $ 1,405,837
Total undiscounted future cash flows (sum of future operating lease payments) 1,124,249 992,490 1,497,380
Imputed interest 51,638 91,543
Undiscounted future cash flows less imputed interest $ 1,061,124 940,852 $ 1,405,837
Financing lease liability, current portion $ 693,432 646,731 $ 730,564
Financing lease liability, non-current portion 533,212 439,869 593,146
Financing lease liability, total $ 1,226,644 1,086,600 $ 1,323,710
Total undiscounted future cash flows (sum of future financing lease payments) 1,319,418 1,165,663 1,428,999
Imputed interest 79,063 105,289
Undiscounted future cash flows less imputed interest $ 1,226,644 1,086,600 $ 1,323,710
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Operating lease costs $ 175,090 $ 175,090 $ 350,181 $ 350,181
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Operating lease costs $ 124,187 $ 175,091 $ 474,368 $ 525,272
6 unchanged paragraphs
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Sale of owned vehicles $ 81,008 $ 155,293 $ 81,008 $ 286,877
Gain (loss) on disposal of assets $ 104,150 $ 155,293 $ 104,150 $ 279,903
During the three and six nine months ended June September 30, 2026 and 2025, the Company recorded a gain (loss) on disposal of assets, which was impacted by the sale of leased vehicles, as follows:
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Sale of leased owned vehicles 23,142 $ — $ — $ 23,142 $ ( 6,974 )
Sale of leased vehicles 52,331 105,642 133,339 392,519
Gain (loss) on disposal of assets $ 52,331 $ 105,642 $ 156,481 $ 385,545
Note 4: EARNINGS (LOSS) PER SHARE INFORMATION 30 changes
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Net Income (Loss) $ 64,793,310 $ 20,634,887 $ ( 155,798,172 ) $ 29,745,625
Basic Weighted-Average Shares Outstanding 233,951,765 206,522,356 221,259,803 202,964,856
The following table presents the calculation of the Company's basic and diluted earnings (loss) per share for the three and six nine months ended June September 30, 2026 and 2025. For all dilutive securities, the treasury stock method of calculating the incremental shares was applied.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Net Income (Loss) $ ( 16,600,229 ) $ ( 51,631,530 ) $ ( 172,398,401 ) $ ( 21,885,905 )
Basic Weighted-Average Shares Outstanding 260,533,239 206,688,003 234,543,417 204,223,621
2 unchanged paragraphs
Restricted stock units 2,646,296 341,611 — 852,082
Performance stock units 1,210,428 113,760 — 250,931
Common warrants — 4,600 — 17,338
Diluted Weighted-Average Shares Outstanding 237,808,489 206,982,327 221,259,803 204,085,207
Basic Earnings (Loss) per Share $ 0.28 $ 0.10 $ ( 0.70 ) $ 0.15
Diluted Earnings (Loss) per Share $ 0.27 $ 0.10 $ ( 0.70 ) $ 0.15
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Restricted stock units — — — —
Performance stock units — — — —
Common warrants — — — —
Diluted Weighted-Average Shares Outstanding 260,533,239 206,688,003 234,543,417 204,223,621
Basic Earnings (Loss) per Share $ ( 0.06 ) $ ( 0.25 ) $ ( 0.74 ) $ ( 0.11 )
Diluted Earnings (Loss) per Share $ ( 0.06 ) $ ( 0.25 ) $ ( 0.74 ) $ ( 0.11 )
The following table presents the securities which were excluded from the Company's computation of diluted earnings (loss) per share for the three and six nine months ended June September 30, 2026 and 2025, as their effect would have been anti-dilutive.
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
1 unchanged paragraph
Stock options to purchase common stock 41,275 65,500 46,110 65,500
Unvested restricted stock units — 3,745,348 7,253,914 2,598,851
Unvested performance stock units 2,495,027 2,570,776 3,464,397 1,000,000
Stock options to purchase common stock 36,000 64,848 42,703 65,280
Unvested restricted stock units 8,088,166 5,328,767 7,535,054 5,262,174
Unvested performance stock units 5,757,608 3,403,082 4,237,201 2,776,101
Note 5: ACQUISITIONS AND DIVESTITURES 6 changes
29 unchanged paragraphs
Oil and Gas Leasehold Acquisition
On August 3, 2026, the Company closed on a purchase agreement to purchase certain oil and gas leasehold interests located in the Central Basin Platform. The total purchase price was approximately $ 17.4 million.
Crane, Ward, and Winkler County Divestiture
On August 17, 2026, the Company completed the sale of certain non-core assets in Crane, Ward, and Winkler Counties to an undisclosed buyer for a total purchase price of $ 9.0 million.
Crane County Waddell Divestiture
On September 30, 2026, the Company completed the sale of certain non-core assets in Crane County, primarily in the Waddell area, to an undisclosed buyer for a total purchase price of approximately $ 21.5 million.
Note 6: DERIVATIVE FINANCIAL INSTRUMENTS 61 changes
4 unchanged paragraphs
The following table presents the impact of the Company's contracts on its Condensed Balance Sheets for the periods indicated.
June September 30, 2026 December 31, 2025
1 unchanged paragraph
Derivative liabilities, current $ 11,373,096 $ 841,193
Derivatives assets, current $ 6,335,601 7,115,775 $ 21,468,134
Derivative assets, noncurrent $ 10,154,821 8,955,873 $ 9,739,430
Derivative liabilities, current $ 44,004,900 $ 841,193
Derivative liabilities, noncurrent $ 12,035,055 20,007,162 $ 2,512,692
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Realized gain (loss) on oil derivatives $ ( 19,617,172 ) $ 433,301 $ ( 25,675,828 ) $ ( 206,966 )
Unrealized gain (loss) on oil derivatives 39,356,764 12,145,940 ( 40,436,306 ) 14,487,365
Gain (loss) on oil derivatives $ 19,739,592 $ 12,579,241 $ ( 66,112,134 ) $ 14,280,399
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
Realized gain (loss) on oil derivatives $ ( 12,326,980 ) $ 2,065,490 $ ( 38,002,808 ) $ 1,858,524
Unrealized gain (loss) on oil derivatives ( 40,095,482 ) ( 3,526,149 ) ( 80,531,788 ) 10,961,216
Gain (loss) on oil derivatives $ ( 52,422,462 ) $ ( 1,460,659 ) $ ( 118,534,596 ) $ 12,819,740
1 unchanged paragraph
Realized gain (loss) on natural gas derivatives $ 1,158,092 $ 244,542 $ 1,940,737 $ 331,215
Unrealized gain (loss) on natural gas derivatives 2,826,742 1,824,271 5,664,898 ( 892,350 )
Gain (loss) on natural gas derivatives $ 3,984,834 $ 2,068,813 $ 7,605,635 $ ( 561,135 )
Gain (loss) on derivative contracts $ 23,724,426 $ 14,648,054 $ ( 58,506,499 ) $ 13,719,264
Realized gain (loss) on natural gas derivatives $ 149,385 $ 520,740 $ 2,090,122 $ 851,955
Unrealized gain (loss) on natural gas derivatives ( 927,203 ) 1,384,224 4,737,695 491,874
Gain (loss) on natural gas derivatives $ ( 777,818 ) $ 1,904,964 $ 6,827,817 $ 1,343,829
Gain (loss) on derivative contracts $ ( 53,200,280 ) $ 444,305 $ ( 111,706,779 ) $ 14,163,569
1 unchanged paragraph
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
For the Three Months Ended For the Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
1 unchanged paragraph
Cash received (paid) for oil derivatives $ ( 19,617,172 ) $ 433,301 $ ( 25,675,828 ) $ ( 206,966 )
Cash received (paid) for natural gas derivatives 1,158,092 244,542 1,940,737 331,215
Cash received (paid) for derivative settlements, net $ ( 18,459,080 ) $ 677,843 $ ( 23,735,091 ) $ 124,249
Cash received (paid) for oil derivatives $ ( 12,326,980 ) $ 2,065,490 $ ( 38,002,808 ) $ 1,858,524
Cash received (paid) for natural gas derivatives 149,385 520,740 2,090,122 851,955
Cash received (paid) for derivative settlements, net $ ( 12,177,595 ) $ 2,586,230 $ ( 35,912,686 ) $ 2,710,479
The following tables reflect the details of current derivative contracts as of June September 30, 2026 (quantities are in barrels (Bbl) for the oil derivative contracts and in million British thermal units (MMBtu) for the natural gas derivative contracts).
Oil Hedges (WTI) Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2027 Q4 2027 Q1 2028 Q2 2028 Q3 2028
Hedged volume (Bbl) 263,400 529,000 509,500 492,000 432,000 412,963 — — —
Weighted average swap price $ 61.77 $ 65.34 $ 62.82 $ 60.45 $ 61.80 $ 57.59 $ — $ — $ —
Hedged volume (Bbl) 563,685 368,000 2,935 272,935 — 32,910 33,435 430,080 415,580 402,614
Weighted average put price $ 60.82 $ 65.00 $ 62.50 64.97 $ — $ 60.00 $ 60.00 $ 55.59 $ 57.50 $ 60.00
Weighted average call price $ 76.19 $ 80.00 $ 73.65 98.45 $ — $ 72.30 $ 72.30 $ 66.02 $ 73.02 $ 77.21
Swaps: WTI NYMEX Rolls
Hedged volume (BBL) 455,000 — — — — — — —
Weighted average swap price $ 3.77 5.71 $ 3.77 — $ 3.67 — $ 3.67 — $ 3.67 — $ 3.67 — $ — $ —
Gas Hedges (Henry Hub) Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2027 Q4 2027 Q1 2028 Q2 2028 Q3 2028
Hedged volume (MMBtu) 600,016 1,072,305 439,678 423,035 1,079,906 1,046,151 1,012,567 984,322 956,865
Weighted average swap price $ 4.19 $ 3.99 $ 4.02 $ 4.02 $ 3.86 $ 4.02 $ 3.77 $ 3.77 $ 3.77
Hedged volume (MMBtu) 648,728 128,000 717,000 694,000 — — — — —
Weighted average put price $ 3.10 $ 3.50 $ 3.99 $ 3.00 $ — $ — $ — $ — $ —
Weighted average call price $ 4.24 $ 5.42 $ 5.21 $ 4.32 $ — $ — $ — $ — $ —
Gas Hedges (Henry Hub) Q3 2028 Q4 2028 Q1 2029 Q2 2029 Q3 2029 Q4 2029 Q1 2030 Q2 2030
Hedged volume (MMBtu) 956,865 931,539 908,117 886,933 866,585 846,134 — —
Weighted average swap price $ 3.77 $ 3.67 $ 3.67 $ 3.67 $ 3.67 $ — $ —
Gas Hedges (basis differential) Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2027 Q4 2027 Q1 2028 Q2 2028 Q3 2028
Hedged volume (MMBtu) 374,623 411,451 196,372 480,325 464,360 449,846 435,403 — —
2 unchanged paragraphs
Hedged volume (MMBtu) 874,121 788,851 960,307 636,710 615,547 596,306 577,163 — —
Weighted average spread price (1)
Gas Hedges (basis differential) Q4 2028 Q1 2029 Q2 2029 Q3 2029 Q4 2029 Q1 2030 Q2 2030
Hedged volume (MMBtu) — — — 259,975 253,840 — —
Weighted average spread price (1)
El Paso Permian Basin basis swaps:
Hedged volume (MMBtu) — — — 606,610 592,294 — —
2 unchanged paragraphs
Note 7: FAIR VALUE MEASUREMENTS 7 changes
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The authoritative guidance requires disclosure of the framework for measuring fair value and requires that fair value measurements be classified and disclosed in one of the following these categories:
15 unchanged paragraphs
Commodity Derivatives - Liabilities $ — $ ( 23,408,151 ) $ — $ ( 23,408,151 )
Total $ — $ ( 6,917,729 ) $ — $ ( 6,917,729 )
As of September 30, 2026
Commodity Derivatives - Assets $ — $ 16,490,422 16,071,648 $ — $ 16,490,422 16,071,648
Commodity Derivatives - Liabilities $ — $ ( 64,012,062 ) $ — $ ( 64,012,062 )
Total $ — $ ( 47,940,414 ) $ — $ ( 47,940,414 )
1 unchanged paragraph
Note 8: REVOLVING LINE OF CREDIT 2 changes
5 unchanged paragraphs
As of June September 30, 2026, $ 360 350 million was outstanding on the Credit Facility and the Company was in compliance with all covenants in the Credit Agreement.
Under the Credit Agreement, the applicable percentage for the unused commitment fee is 0.5 % per annum for all levels of borrowing base utilization. As of June September 30, 2026, the Company's unused line of credit was approximately $ 225.0 235.0 million, which was calculated by subtracting the outstanding Credit Facility balance of $ 360 350 million and standby letters of credit of $ 35,000 in total ($ 10,000 with a federal agency and $ 25,000 with an insurance company for New Mexico state surety bonds) from the $ 585 million borrowing base.
Note 9: ASSET RETIREMENT OBLIGATION 15 changes
The Company records the obligation to plug and abandon oil and gas wells at the dates properties are either acquired or the wells are drilled. The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion expense and any revisions made to the costs or timing estimates. The asset retirement obligation is incurred using an annual credit-adjusted risk-free discount rate at the applicable dates. A reconciliation for the asset retirement obligation during the six nine months ended June September 30, 2026 is as follows:
2 unchanged paragraphs
Liabilities incurred 26,854
Liabilities sold ( 51,635 )
Liabilities settled ( 281,953 )
Liabilities incurred 55,007
Liabilities sold ( 69,166 )
Liabilities settled ( 888,957 )
1 unchanged paragraph
Accretion expense 797,440
Balance, June 30, 2026
Accretion expense 1,203,169
Balance, September 30, 2026
(1) The revisions recorded during the six nine months ended June September 30, 2026 consisted of additional acquired working interests in certain wells.
1 unchanged paragraph
June September 30, 2026 December 31, 2025
1 unchanged paragraph
Asset retirement obligations, non-current 30,823,001 30,632,348 29,972,429
Asset retirement obligations $ 31,114,845 30,924,192 $ 30,390,955
Note 10: COMMON WARRANTS AND EQUITY OFFERING 2 changes
Common Warrants – During the year ended December 31, 2024 and through October 2025, the Company had 78,200 exercisable common warrants outstanding, with a contractual exercise price of $ 0.80 per warrant. All of the common warrants expired in October 2025. During the six nine months ended June September 30, 2025, no common warrants were exercised.
1 unchanged paragraph
Common Warrants Exercise Price Proceeds Received
Note 11: SHARE-BASED COMPENSATION 31 changes
June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Share-based compensation expense charged against income for share-based awards during the three and six nine months ended June September 30, 2026 and 2025 was as follows. These amounts are included in General and administrative expense in the Condensed Statements of Operations.
Three Months Ended Six Nine Months Ended
September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025
4 unchanged paragraphs
Total share-based compensation $ 2,149,596 $ 1,351,839 $ 3,674,404 $ 3,042,797
Total share-based compensation $ 2,497,039 $ 1,618,600 $ 6,171,443 $ 4,661,397
In 2011, the Board of Directors (the "Board") of the Company approved and adopted a long-term incentive plan (the "2011 Plan"), which was subsequently approved and amended by the stockholders. As of June September 30, 2026, there were no shares available for grant under the 2011 Plan.
In 2021, the Board and Company stockholders approved and adopted the Ring Energy, Inc. 2021 Omnibus Incentive Plan (as amended, the "2021 Plan"). The 2021 Plan provides that the Company may grant options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards, other share-based awards, other cash-based awards, or any combination of the foregoing. As of June September 30, 2026, there were 3,424,002 3,418,220 shares available for grant under the 2021 Plan.
In connection with the hiring of the Company's Executive Vice President and Chief Financial Officer in February 2026, the Board approved inducement awards to the executive officer that are comprised of 317,460 (the "Inducement RSUs") restricted stock units ("RSUs") (the "Inducement RSUs") and 476,190 performance stock units ("PSUs") (for which up to 952,380 shares may be earned) (the "Inducement PSUs"). The Inducement RSUs will vest in three equal annual installments beginning on March 5, 2027, subject to continued service through the applicable vesting date. The Inducement PSUs have a performance period of January 1, 2026 to December 31, 2028, subject to performance goals and continued service through December 31, 2028. These inducement awards were granted outside of the 2021 Plan; however, they have terms and conditions consistent with those set forth under the 2021 Plan and generally vest under the same respective vesting schedules as RSU and PSU awards granted under the 2021 Plan. The Inducement RSUs are included in the RSU award table below. The Inducement PSUs are included in the PSU award table below.
1 unchanged paragraph
A summary of the status of the stock options as of June September 30, 2026 and 2025 and changes during the respective six nine month periods then ended are as follows:
6 unchanged paragraphs
Expired ( 10,000 ) 14.54
Outstanding, September 30, 2025 55,500 $ 10.01 0.95 years $ —
Exercisable, September 30, 2025 55,500 $ 10.01 0.95 years
6 unchanged paragraphs
Outstanding, September 30, 2026 36,000 $ 11.75 0.20 years $ —
Exercisable, September 30, 2026 36,000 $ 11.75 0.20 years
The intrinsic values were calculated using the closing price on June September 30, 2026 of $ 1.08 1.31 and the closing price on June September 30, 2025 of $ 0.79 1.09 . As of June September 30, 2026, the Company had $ 0 of unrecognized compensation cost related to stock options.
1 unchanged paragraph
A summary of the RSUs outstanding as of June September 30, 2026 and 2025, respectively, and changes during the respective six nine month periods then ended are as follows:
9 unchanged paragraphs
Forfeited or rescinded ( 65,244 ) 1.36
Vested ( 349,726 ) 1.57
Outstanding, September 30, 2025 5,058,171 $ 1.40
8 unchanged paragraphs
Forfeited or rescinded ( 21,429 ) 1.26
Vested ( 25,534 ) 1.97
Outstanding, September 30, 2026 8,094,155 $ 1.29
As of June September 30, 2026, the Company had $ 6,944,824 5,517,403 of unrecognized compensation cost related to RSU grants that will be recognized over a weighted average period of 2.25 2.04 years. Grant activity for the six nine months ended June September 30, 2026 was primarily RSU grants for the annual long-term incentive plan awards for employees.
1 unchanged paragraph
A summary of the PSUs outstanding as of June September 30, 2026 and 2025, respectively, along with changes during the respective six nine month periods then ended are as follows:
7 unchanged paragraphs
Forfeited or rescinded — —
Vested ( 549,900 ) 1.83
Outstanding, September 30, 2025 2,966,748 $ 1.75
6 unchanged paragraphs
Forfeited or rescinded — —
Outstanding, September 30, 2026 5,757,608 $ 1.89
As of June September 30, 2026, the Company had $ 8,388,870 7,480,316 of unrecognized compensation cost related to the PSU awards that will be recognized over a weighted average period of 2.32 2.10 years.
Note 12: COMMITMENTS AND CONTINGENCIES 3 changes
Surety Bonds – As of June September 30, 2026, the Company had $ 3,582,614 3,682,614 in total surety bonds. As of December 31, 2025, the Company had $ 2,275,000 in total surety bonds. A Texas Railroad Commission ("RRC") required blanket performance bond to operate 100 or more wells in the State of Texas in the amount of $ 250,000 and another RRC required blanket plugging extension bond in the amount of $ 2,000,000 . Both RRC bonds have zero collateral requirements. A surety bond in the amount of $ 25,000 to operate wells in the State of New Mexico was also in place as of June September 30, 2026 and December 31, 2025; however, that bond will likely be released as the Company no longer operates wells in New Mexico. In February 2026, the Company added an RRC required bond in the amount of $ 99,740 covering a produced water recycling pit. In April 2026, the Company obtained an RRC required bond in the amount of $ 1,207,874 covering another produced water recycling pit. In September 2026, the Company added an RRC required bond in the amount of $ 100,000 for another produced water recycling pit. Total expenses related to the surety bonds were $ 27,441 47,229 and $ 15,000 26,250 for the six nine months ended June September 30, 2026 and 2025, respectively. The New Mexico bond is supported by a $ 25,000 standby letter of credit collateralized by the Credit Facility.
Standby Letters of Credit – As of June September 30, 2026 and December 31, 2025, the Company had total standby letters of credit outstanding of $ 35,000 , consisting of a $ 10,000 standby letter of credit in favor of a federal agency and a $ 25,000 standby letter of credit issued to support bonding requirements related to the Company's former operations in the State of New Mexico. The Company no longer conducts operations in New Mexico and expects the standby letter of credit related to the New Mexico bonding requirements to be released, subject to regulatory approval. No amounts had been drawn under either standby letter of credit as of June September 30, 2026 and December 31, 2025, and no liability has been recorded in the accompanying Condensed Balance Sheets related to these arrangements.
Legal Proceedings – In July 2021, a lawsuit was filed in Harris County District Court, Houston, Texas, styled EPUS Permian Assets, LLC, v. Ring Energy, Inc. The plaintiff asserted breach of contract, money had and received by fraudulent inducement, unjust enrichment and constructive trust and requested its forfeited deposit of $ 5.5 million plus related damages, and attorneys' fees and costs. On September 23, 2026, following a jury trial, the court returned a verdict in favor of the Company on all of the plaintiff's claims. The plaintiff may appeal and the matter will not be final until any appeal is resolved.
Note 13: SEGMENT REPORTING 111 changes
3 unchanged paragraphs
For the Three Months Ended June September 30, For the Six Nine Months Ended June September 30,
3 unchanged paragraphs
Gathering, transportation and processing costs ( 101,902 ) ( 133,809 ) ( 218,951 ) ( 337,421 )
Ad valorem taxes ( 2,202,160 ) ( 1,648,647 ) ( 4,404,697 ) ( 3,180,755 )
Oil and natural gas production taxes ( 5,047,619 ) ( 3,832,607 ) ( 8,601,510 ) ( 7,417,062 )
Gathering, transportation and processing costs ( 180,787 ) ( 126,569 ) ( 399,738 ) ( 463,990 )
Ad valorem taxes ( 2,210,911 ) ( 2,446,565 ) ( 6,615,608 ) ( 5,627,320 )
Oil and natural gas production taxes ( 4,584,698 ) ( 3,670,987 ) ( 13,186,208 ) ( 11,088,049 )
Exploration and Production segment profit $ 78,920,346 76,000,039 $ 56,741,715 51,838,743 $ 128,596,189 204,596,228 $ 110,835,195 162,673,938 (1) All of the Company's revenues are generated within the Permian Basin within the United States.
1 unchanged paragraph
For the Three Months Ended June September 30, For the Six Nine Months Ended June September 30,
1 unchanged paragraph
Workovers $ 3,443,178 $ 3,173,838 $ 6,686,781 $ 5,990,047
Other lease operating expenses $ 14,966,284 $ 17,072,143 $ 29,845,025 $ 33,933,486
Total lease operating expenses $ 18,409,462 $ 20,245,981 $ 36,531,806 $ 39,923,533
Workovers $ 3,531,610 $ 3,027,065 $ 10,218,391 $ 9,017,112
Other lease operating expenses 15,835,617 17,491,407 45,680,642 51,424,893
Total lease operating expenses $ 19,367,227 $ 20,518,472 $ 55,899,033 $ 60,442,005
1 unchanged paragraph
For the Three Months Ended June September 30, 2026
1 unchanged paragraph
Lease operating expenses ( 18,409,462 ) — ( 18,409,462 )
Oil, Natural Gas, and Natural Gas Liquids Revenues $ 104,681,489 102,343,662 $ — $ 104,681,489 102,343,662
Lease operating expenses ( 19,367,227 ) — ( 19,367,227 )
Gathering, transportation and processing costs ( 101,902 180,787 ) — ( 101,902 180,787 )
Ad valorem taxes ( 2,202,160 2,210,911 ) — ( 2,202,160 2,210,911 )
Oil and natural gas production taxes ( 5,047,619 4,584,698 ) — ( 5,047,619 4,584,698 )
2 unchanged paragraphs
Operating lease expense — ( 175,090 ) ( 175,090 )
General and administrative expense — ( 7,954,230 ) ( 7,954,230 )
Interest income — 148,540 148,540
Interest (expense) — ( 8,379,552 ) ( 8,379,552 )
Other income — 9,600 9,600
Capital expenditures $ 43,169,155 $ — $ 43,169,155
Asset retirement obligation accretion — ( 401,944 405,729 ) ( 401,944 405,729 )
Operating lease expense — ( 124,187 ) ( 124,187 )
General and administrative expense — ( 9,046,598 ) ( 9,046,598 )
Interest income — 108,728 108,728
Interest (expense) — ( 7,695,843 ) ( 7,695,843 )
Gain (loss) on derivative contracts — 23,724,426 23,724,426 ( 53,200,280 ) ( 53,200,280 )
Gain (loss) on disposal of assets — 104,150 104,150 52,331 52,331
Income (Loss) Before Benefit from (Provision for) Income Taxes $ 78,920,346 76,000,039 $ ( 13,038,990 91,212,311 ) $ 65,881,356 ( 15,212,272 )
1 unchanged paragraph
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and 75 more changes in the filing
Note 14: SUBSEQUENT EVENTS 1 change
and 1 more change in the filing
MD&A 321 changes
11 unchanged paragraphs
6 unchanged paragraphs
2 unchanged paragraphs
1 unchanged paragraph
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and 321 more changes in the filing
Market risk 8 changes
4 unchanged paragraphs
1 unchanged paragraph
1 unchanged paragraph
3 unchanged paragraphs
and 8 more changes in the filing
Controls and procedures 1 change
6 unchanged paragraphs
and 1 more change in the filing
Legal proceedings 1 change
and 1 more change in the filing
Other information 1 change
and 1 more change in the filing
Exhibits 4 changes
13 unchanged paragraphs
3 unchanged paragraphs
3 unchanged paragraphs
and 4 more changes in the filing
Unchanged: Notes to the financial statements, Risk factors, Unregistered sales of stock, Defaults on senior securities, Mine Safety Disclosures
Compared by code from the two filings' text and XBRL. Not advice.
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