UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36057

RING ENERGY, INC.

(Exact Name of registrant as specified in its charter)


Nevada	90-0406406
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)


1725 Hughes Landing, Suite 900 The Woodlands, TX	77380
(Address of principal executive offices)	(Zip Code)

(281) 397-3699

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act


Title of each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	REI	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Exchange Act).

☐ Yes ⌧ No

The registrant has one class of common stock of which 99,275,937 shares were outstanding at May 10, 2021.

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INDEX

Ring Energy, Inc.

For the Quarter Ended March 31, 2021


PART I – FINANCIAL INFORMATION	5

Item 1. Financial Statements.	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3. Quantitative and Qualitative Disclosures About Market Risk	30

Item 4. Controls and Procedures	31

PART II – OTHER INFORMATION	33

Item 1. Legal Proceedings	33

Item 1A. Risk Factors	33

Item 6. Exhibits	34

SIGNATURES	35

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Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position and potential growth opportunities. Our forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,” “targets” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report and in our annual report on Form 10-K for the year ended December 31, 2020. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to:

●

declines or volatility in the prices we receive for our oil and natural gas;

●

our ability to raise additional capital to fund future capital expenditures;

●

our ability to generate sufficient cash flow from operations, borrowings or other sources to enable us to fully develop and produce our oil and natural gas properties;

●

general economic conditions, whether internationally, nationally or in the regional and local market areas in which we do business;

●

risks associated with drilling, including completion risks, cost overruns and the drilling of non-economic wells or dry holes;

●

uncertainties associated with estimates of proved oil and natural gas reserves;

●

the presence or recoverability of estimated oil and natural gas reserves and the actual future production rates and associated costs;

●

risks and liabilities associated with acquired companies and properties;

●

risks related to integration of acquired companies and properties;

●

potential defects in title to our properties;

●

cost and availability of drilling rigs, equipment, supplies, personnel and oilfield services;

●

geological concentration of our reserves;

●

environmental or other governmental regulations, including legislation of hydraulic fracture stimulation;

●

our ability to secure firm transportation for oil and natural gas we produce and to sell the oil and natural gas at market prices;

●

exploration and development risks;

●

management’s ability to execute our plans to meet our goals;

●

our ability to retain key members of our management team on commercially reasonable terms;

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●

the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems or on systems and infrastructure used by the oil and gas industry;

●

weather conditions;

●

effectiveness of our internal control over financial reporting;

●

actions or inactions of third-party operators of our properties;

●

costs and liabilities associated with environmental, health and safety laws;

●

our ability to find and retain highly skilled personnel;

●

operating hazards attendant to the oil and natural gas business;

●

competition in the oil and natural gas industry;

●

evolving geopolitical and military hostilities in the Middle East;

●

economic and competitive conditions;

●

lack of available insurance;

●

cash flow and anticipated liquidity;

●

continuing compliance with the financial covenant contained in our amended and restated credit agreement;

●

the ongoing COVID-19 pandemic, including any reactive or proactive measures taken by businesses, governments and by other organizations related thereto, and the direct and indirect effects of COVID-19 on the market for and price of oil; and

●

the other factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Should our underlying assumptions prove incorrect or the consequences of the aforementioned risks worsen, actual results could differ materially from those expected.

Forward-looking statements speak only as to the date hereof. All such forward-looking statements and any subsequent written or oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the statements contained herein or referred to in this section and any other cautionary statements that may accompany such forward-looking statements. Except as otherwise required by applicable law, we disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

There may also be other risks and uncertainties that we are unable to predict at this time or that we do not now expect to have a material adverse impact on our business.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

The unaudited condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures required by accounting principles generally accepted in the United States and normally included in Annual Reports on Form 10-K have been omitted. Although management believes that our disclosures are adequate to make the information presented not misleading, these unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and related footnotes included in its most recent Annual Report on Form 10-K.

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RING ENERGY, INC.

CONDENSED BALANCE SHEETS

(UNAUDITED)


	March 31,		December 31,
As of	2021		2020
ASSETS
Current Assets
Cash and cash equivalents	$	1,700,510	$	3,578,634
Accounts receivable		20,898,591		14,997,979
Joint interest billing receivable		1,358,129		1,327,262
Derivative receivable		581,424		499,906
Prepaid expenses and retainers		230,909		396,109
Total Current Assets		24,769,563

SEC Form 10-Q filed by Ring Energy, Inc.