Ring Energy, Inc. (NYSE American: REI) (“Ring”) (“Company”)
announced today financial results for the first quarter ended March
31, 2018. For the three month period ended March 31, 2018, Ring had
oil and gas revenues of $29,891,391 compared to $12,243,793 for the
quarter ended March 31, 2017, and net income of $5,665,634, or
$0.10 per diluted share, compared to net income of $1,279,281, or
$0.03 per diluted share.
For the three months ended March 31, 2018, the net income
included a pre-tax “Unrealized Loss on Derivatives” of $790,701.
Excluding this item, the net income per diluted share would have
been $0.11.
For the three months ended March 31, 2018, oil sales volume
increased to 479,864 barrels, compared to 240,260 barrels for the
same period in 2017, an 99.7% increase, and gas sales volume
increased to 210,031 MCF (thousand cubic feet), compared to 168,349
MCF for the same period in 2017, a 24.7% increase. On a barrel of
oil equivalent (“BOE”) basis for the three months ended March 31,
2018, production sales increased to 514,869 BOEs, compared to
268,318 BOEs for the same period in 2017, a 91.9% increase. The
average commodity prices received by Ring were $60.73 per barrel of
oil and $3.58 per MCF of natural gas for the quarter ended March
31, 2018, compared to $48.69 per barrel of oil and $3.25 per MCF of
natural gas for the quarter ended March 31, 2017.
Lease operating expenses, including production taxes, for the
three months ended March 31, 2018 were $14.00 per BOE, a 14%
increase from the prior year. Depreciation, depletion and
amortization costs, including accretion, increased 25% to $16.82
per BOE. General and administrative costs, which included a
$1,081,199 charge for stock based compensation, were $5.99 per BOE,
a 43% decrease.
Cash provided by operating activities, before changes in working
capital, for the three months ended March 31, 2018 was $19,168,262
or $0.33 per fully diluted share, compared to $7,221,936, or $0.14
per fully diluted share for the same period in 2017. Earnings
before interest, taxes, depletion and other non-cash items
(“Adjusted EBITDA”) for the three months ended March 31, 2018 was
$19,203,791, or $0.33 per fully diluted share, compared to
$7,105,257, or $0.14 per fully diluted share for the same period in
2017. (See accompanying table for a reconciliation of net income to
adjusted EBITDA).
In February 2018, the Company closed on an underwritten public
stock offering of 6,164,000 shares of its common stock, including
804,000 shares sold pursuant to the full exercise of an
over-allotment option, at $14.00 per share for gross proceeds of
$86,296,000. Total net proceeds from the offering were $81,822,066
after deducting underwriting commissions and offering expenses.
There was no outstanding debt on the Company’s $500 million
senior secured credit facility at March 31, 2018.
Ring’s Chief Executive Officer, Mr. Kelly Hoffman, stated, “Our
first quarter results have gotten the Company off to a great start
for 2018. We continue to have excellent results from our horizontal
drilling program. We have 60 wells scheduled to be drilled this
year and look forward to continued exceptional results. Our new gas
pipeline is completed, and now, instead of having to flare the gas
associated with our horizontal drilling, we are selling it. This,
along with added saltwater disposal wells and the restimulation of
some of our older wells, is only adding to our momentum. The North
Gaines and Brushy Canyon wells are on track with encouraging
results that will be released in the near future. Our goal of being
cash flow positive by year end is on track. Our dedicated staff
continues to search for and evaluate complementary, accretive
properties and opportunities that will build on our success. With
the completion of our stock offering in February, we have
strengthened an already strong balance sheet. We look forward to
the rest of 2018 and couldn’t be more excited for Ring and its
shareholders.”
Non-GAAP Financial Measures:
Net income for the three months ended March 31, 2018 includes a
non-cash charge for stock based compensation of $1,081,199.
Excluding this item, the Company’s net income would have been $0.11
per diluted share for the three months ended March 31, 2018. 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.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, 2017, its Form 10-Q for
the quarter ended March 31, 2018 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,
2018 2017
(Unaudited)
(Unaudited)
Oil and Gas Revenues $ 29,891,391 $
12,243,793
Costs and Operating Expenses Oil
and gas production costs 5,781,910 2,705,371 Oil and gas production
taxes 1,425,882 583,264 Depreciation, depletion and amortization
8,501,379 3,474,019 Asset retirement obligation accretion 161,120
137,176 General and administrative expense 3,085,980
2,841,111
Total Costs and Operating
Expenses 18,956,271 9,740,941
Income from Operations 10,935,120
2,502,852
Other Income
(Expense) Interest income 8,953 116,679 Interest expense
(44,483 ) - Realized loss on derivatives (1,475,026 ) - Unrealized
loss on change in fair value of derivatives (790,701 )
-
Net Other Income (Expense)
(2,301,257 ) 116,679
Income
before tax provision 8,633,863 2,619,531
Provision
for Income Taxes (2,968,229 ) (1,340,250 )
Net Income $ 5,665,634 $ 1,279,281
Basic Income Per Common Share $ 0.10 $ 0.03
Diluted Income Per Common Share $ 0.10 $ 0.03
Basic Weighted-Average Common Shares Outstanding 56,415,673
49,114,731
Diluted Weighted-Average Common Shares
Outstanding 57,949,389 50,414,435
COMPARATIVE OPERATING STATISTICS
Three Months Ended March 31, 2018 2017 Change Net Production
- BOE per day 5,721 2,981 92 % Per BOE:
Average Sales Price
$58.06
$45.63
27 % Lease Operating Expenses 11.23 10.08 11 % Production
Taxes 2.77 2.17 28 % DD&A 16.51 12.95 27 % Accretion 0.31 0.51
-39 % General & Administrative Expenses 5.99 10.59 -43 %
RING ENERGY, INC. CONSOLIDATED BALANCE SHEET
March 31,
December 31,
2018
2017
ASSETS Current Assets Cash $47,036,101
$15,006,581 Accounts receivable 13,447,211 12,833,883 Joint
interest billing receivable 636,336 1,054,022 Prepaid expenses and
retainers
131,027
229,438
Total Current Assets 61,250,675 29,123,924
Properties and Equipment Oil and natural gas properties
subject to depletion and amortization 483,115,061 433,591,134 Fixed
assets subject to depreciation 1,848,405 1,884,818
Total
Property and Equipment 484,963,466 435,475,952 Accumulated
depreciation, depletion and amortization (70,344,636) (61,864,932)
Net Property and Equipment 414,618,830 373,611,020
Deferred Income Taxes 8,263,971 11,232,200
Deferred Financing Costs
67,671 135,342
Total Assets $484,201,147 $414,102,486
LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities Accounts payable $24,822,069 $44,475,163 Derivative
Liabilities $4,758,987 $3,968,286
Total Current Liabilities
29,581,056 48,443,449 Asset retirement obligations 9,447,852
9,055,697
Total Liabilities 39,028,908 57,499,146
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; 60,388,029 shares and 54,224,029
shares outstanding, respectively
60,388 54,224 Additional paid-in capital 480,801,870 397,904,769
Accumulated deficit (35,690,019) (41,355,653)
Total
Stockholders' Equity 445,172,239 356,603,340
Total
Liabilities and Stockholders' Equity $484,201,147 $414,102,486
RING ENERGY, INC. STATEMENTS OF CASH
FLOW Three Months Ended March 31,
2018
2017
Cash Flows From Operating Activities Net income $
5,665,634 $ 1,279,281
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation, depletion and amortization 8,501,379 3,474,019
Accretion expense 161,120 137,176 Share-based compensation
1,081,199 991,210 Deferred income tax provision 1,809,625 923,390
Excess tax deficiency related to share-based compensation 1,158,604
416,860 Change in fair value of derivative instruments 790,701 -
Changes in assets and liabilities: Accounts receivable (195,642 )
(1,119,947 ) Prepaid expenses and retainers 166,082 161,693
Accounts payable (32,653,094 ) 4,761,819 Settlement of asset
retirement obligation (149,772 ) (8,929
)
Net Cash Provided by (Used in) Operating Activities
(13,664,164 ) 11,016,572
Cash Flows
from Investing Activities Payments to purchase oil and natural
gas properties (1,061,195 ) (3,924,404 ) Payments to develop oil
and natural gas properties (35,081,925 ) (19,796,719 ) Disposal of
fixed assets subject to depreciation 14,738 - Purchase of inventory
for development - (2,816,165 )
Net Cash Used in Investing Activities (36,128,382 )
(26,537,288 )
Cash Flows From Financing
Activities Amounts paid for registration statement for future
offerings - (147,537 ) Proceeds from issuance of common stock, net
of offering costs 81,822,066 -
Net Cash Provided by (Used in) Financing Activities
81,822,066 (147,537 )
Net
Decrease in Cash 32,029,520 (15,668,253 )
Cash at Beginning
of Period 15,006,581
71,086,381
Cash at End of Period $ 47,036,101
$ 55,418,128
Supplemental Cash Flow
Information Cash paid for interest $ 44,483
-
Noncash Investing and Financing
Activities Asset retirement obligation incurred during
development $ 380,807 $ 244,372 Use of inventory in property
development - $ 687,443
Capitalized expenditures attributable to
drilling projects financed through current liabilities
$ 13,000,000 $ 4,700,000
RECONCILIATION OF CASH FLOW FROM
OPERATIONS Net cash provided by operating activities
($13,664,164 ) $ 11,016,572 Change in operating assets and
liabilities 32,832,426
(3,794,636 ) Cash flow from operations $ 19,168,262
$ 7,221,936 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,
2018
2017
NET INCOME (LOSS) $ 5,665,634 $ 1,279,281
Interest (income) (8,953 ) (116,679 ) Interest expense 44,483 -
Income tax expense (benefit) 1,809,625 923,390 Excess tax benefits
related to share-based compensation 1,158,604 416,860 Depreciation,
depletion and amortization 8,501,379 3,474,019 Accretion of
discounted liabilities 161,120 137,176 Share-based compensation
1,081,199 991,210 Change in fair value of derivative instruments
790,701 -
ADJUSTED EBITDA
$ 19,203,792 $ 7,105,257
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version on businesswire.com: https://www.businesswire.com/news/home/20180508006672/en/
K M Financial, Inc.Bill Parsons, 702-489-4447
Ring Energy (AMEX:REI)
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