Ring Energy Announces Financial and Operating Results for First Quarter 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 10
horizontal wells we drilled on our Central Basin Platform (“CBP”)
property, our enthusiasm has only increased. Our staff has amassed a
premier 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.
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,
2016, its Form 10-Q for the quarter ended March 31, 2017 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,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Oil and Gas Revenues
|
|
|
|
$
|
12,243,793
|
|
|
$
|
6,092,388
|
|
|
|
|
|
|
|
|
|
Costs 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
|
|
|
|
-
|
|
|
|
(415,508
|
)
|
Interest income
|
|
|
|
116,679
|
|
|
|
2,887
|
|
|
|
|
|
|
|
|
|
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 Income (Loss) Per Common Share
|
|
|
$
|
0.03
|
|
|
|
($0.50
|
)
|
Diluted Income (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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 & Administrative Expenses
|
|
|
|
10.59
|
|
|
9.48
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RING ENERGY, INC.
|
CONSOLIDATED BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
December 31,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash
|
|
|
$
|
55,418,128
|
|
|
|
$
|
71,086,381
|
|
Accounts receivable
|
|
|
|
4,756,301
|
|
|
|
|
3,453,238
|
|
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 Liabilities
|
|
|
|
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
|
|
Share-based compensation
|
|
|
|
991,210
|
|
|
|
584,325
|
|
Deferred income tax provision (benefit)
|
|
|
|
923,390
|
|
|
|
(8,971,057
|
)
|
Excess tax benefits related to share-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
|
|
|
|
(1,741,026
|
)
|
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
|
)
|
|
|
(3,901,658
|
)
|
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
|
|
Noncash 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
|
$
|
1,279,281
|
|
|
|
($15,275,044
|
)
|
|
|
|
|
|
|
|
|
|
|
Interest (income)
|
|
|
|
(116,679
|
)
|
|
|
(2,887
|
)
|
Interest expense
|
|
|
|
-
|
|
|
|
415,508
|
|
Income tax expense (benefit)
|
|
|
|
923,390
|
|
|
|
(8,971,057
|
)
|
Excess tax benefits related to share-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
|
|
Share-based compensation
|
|
|
|
991,210
|
|
|
|
584,325
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA
|
|
|
$
|
7,105,257
|
|
|
$
|
1,666,936
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170509006691/en/ Copyright Business Wire 2017
Source: Business Wire
(May 9, 2017 - 4:14 PM EDT)
News by QuoteMedia
www.quotemedia.com
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