Item 1A. Risk Factors
Item 1A. Risk Factors
We are subject to certain risks and hazards due to the nature of the business activities we conduct. For a discussion of these risks, see “Item 1A. Risk Factors” in the 2019 Form 10-K in addition to the risks described below. Other than as described below, there have been no material changes to the risks described in the 2019 Form 10-K. We may experience additional risks and uncertainties not currently known to us. Furthermore, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect us. Any such risk, in addition to those described below and in the 2019 Form 10-K, may materially and adversely affect our business, financial condition, cash flows and results of operations.
The ongoing COVID-19 pandemic, and the relations of and agreements between OPEC+ producers, could disrupt our operations and adversely impact our business and financial results. In March 2020, the World Health Organization classified the outbreak of COVID-19 as a pandemic. The nature of COVID-19 led to worldwide shutdowns, reductions in commercial and interpersonal activity, and changes in consumer behavior. In attempting to control the spread of COVID-19, governments around the world imposed regulations such as shelter-in-place orders, quarantines, executive orders and similar restrictions. As a result, the global economy has been marked by significant slowdown and uncertainty, which in turn has led to a precipitous decline in oil prices in response to decreased demand, further exacerbated by the OPEC+ price war during the first quarter 2020 and global storage shortages. The confluence of these events has resulted in a significantly weaker outlook for oil and natural gas producers, including reduced operating and capital budgets as well as diminished market confidence in overall industry viability. While OPEC+ producers have agreed to cut oil production to a limited extent, downward pressure on commodity prices has remained and could continue for the foreseeable future. We currently are unable to predict the duration or severity of the spread of COVID-19 or the adverse effects thereof, including a global economic recession resulting from the pandemic, or the continuance or effectiveness of the OPEC+ voluntary production adjustments (or the terms thereof or compliance therewith). If economic and industry conditions do not improve, these factors will adversely impact our financial condition and results of operations.
The current environment may make it even more difficult to comply with our covenants and other restrictions in our Credit Facility, and a lack of confidence in our industry on the part of the financial markets may result in one or more of the following, any of which could lead to reduced liquidity: a lack of access to capital; an event of default under our Credit Facility; the possible acceleration of our repayment of outstanding debt under our Credit Facility; the exercise of certain remedies by our lenders; or a limited or total inability to refinance our debt.
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities.
None.
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Table of Contents
Item 6. Exhibits
Incorporated by Reference
Exhibit
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Filed
Here-with
1.1
Underwriting Agreement by and between the Company and A.G.P./Alliance Global Partners, dated October 27, 2020
8-K
001-36057
1.1
10/29/20
2.1
Purchase and Sale Agreement dated February 25, 2019, among Ring Energy, Inc. and Wishbone Energy Partners, LLC, Wishbone Texas Operating Company LLC and WB WaterWorks, LLC
8-K
001-36057
2.1
02/28/19
3.1
Articles of Incorporation (as amended)
10-K
000-53920
3.1
04/01/13
3.2
Current Bylaws
8-K
000-53920
3.2
01/24/13
4.1
Securities Purchase Agreement, dated October 27, 2020
8-K
001-36057
4.1
10/29/20
4.2
Registration Rights Agreement, dated April 9, 2019, by and between Ring Energy, Inc. and Wishbone Energy Partners, LLC
8-K
001-36057
4.1
04/12/19
4.3
Description of Ring Energy, Inc. equity securities registered under Section 12(b) of the Securities Exchange Act of 1934, as amended
10-K
001-36057
4.2
03/16/20
10.1
Second Amendment to Amended and Restated Credit Agreement, dated June 17, 2020, by and among Ring Energy, Inc., the lenders party thereto, and Truist Bank, as administrative agent for the lenders and as issuing bank.
8-K
001-36057
10.1
06/19/20
10.2
Executive Employment and Severance Agreement, dated as of September 30, 2020, by and between the Company and Paul D. McKinney
8-K
001-36057
10.1
10/06/20
31.1
Rule 13a-14(a) Certification by Chief Executive Officer
X
31.2
Rule 13a-14(a) Certification by Chief Financial Officer
X
32.1
Section 1350 Certification by Chief Executive Officer
X
32.2
Section 1350 Certification by Chief Financial Officer
X
101.SCH
XBRL Taxonomy Extension Schema Document
X
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
36
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Ring Energy, Inc.
Date: November 9, 2020
By:
/s/ Paul D. McKinney
Paul C. McKinney
Chief Executive Officer and Director
(Principal Executive Officer)
Date: November 9, 2020
By:
/s/ William R. Broaddrick
William R. Broaddrick
Chief Financial Officer
(Principal Financial and Accounting Officer)
37
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.