Ring Energy Announces Financial Results for First Quarter 2015

Wednesday, May 6, 2015 3:23 pm CDT

Dateline:

MIDLAND, Texas

Public Company Information:

NYSEMKT:
REI

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.

www.ringenergy.com

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  

 

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  
 

Contact:

K M Financial, Inc.
Bill Parsons, 702-489-4447

Stock Information

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Investor Contact

Bill Parsons
901 W. Wall St. Suite 300
Midland, TX 79701
Phone: 702.489.4447
k-m-financial@msn.com

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