What changed in this filing

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Item 9A. Controls and Procedures

2025-03-05 compared with 2024-03-07 · 399 added, 366 removed, 1311 unchanged (37% of the section changed)

10 unchanged sentences

There were no changes in our internal control over financial reporting that occurred during the fourth quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting and Report of Independent Accounting Firm

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting.

35 unchanged sentences

Other Information

On March 6, 2024, the Board, upon the recommendation of the compensation committee of the Board (the “Compensation Committee”), approved the Ring Energy, Inc.

Change in Control and Severance Benefit Plan (the “CIC Plan”) which provides for severance benefits to our named executive officers (and certain other officers and key employees), including:

McKinney, Chairman of the Board and Chief Executive Officer (the “Tier 1 NEO”), and Marinos Baghdati, Executive Vice President of Operations, Stephen D.

Brooks, Executive Vice President of Land, Legal, Human Resources and Marketing, Alexander Dyes, Executive Vice President of Engineering and Corporate Strategy, and Travis T.

Thomas Executive Vice President and Chief Financial Officer (collectively, the “Tier 2 NEOs” and with the Tier 1 NEO, collectively, the “NEOs”).

The CIC Plan supersedes and replaces all other severance arrangements between the Company and the NEOs, which previously had been governed by separate employment agreements.

Pursuant to the CIC Plan, following a Change in Control (as defined in the CIC Plan) and during the “protection period,” which period extends from the date six months prior to a Change in Control until the date 24 months following the occurrence of a Change in Control, if the Tier 1 NEO’s employment is terminated by the Company without Cause (as defined in the CIC Plan) or by him for a CIC Good Reason (as defined in the CIC Plan), he is entitled to (1) 300% of his annual base salary;

(2) 300% of his most recent target annual bonus (the “AIP Amount”);

(3) 100% of his pro-rated AIP Amount (based on the number of days employed during the year of termination);

(4) acceleration and vesting of his outstanding equity awards;

and (5) reimbursement of 24 months of health benefits.

In addition, following the Tier 1 NEO’s death or disability, he would be entitled to (1) acceleration and vesting of his outstanding equity awards;

and (2) reimbursement of 12 months of health benefits.

Pursuant to the CIC Plan, if the Tier 1 NEO’s employment with the Company is terminated by the Company without Cause or by him for a Good Reason (as defined in the CIC Plan) and not during the applicable protection period, he is entitled to receive (1) 200% of his annual base salary, (2) 200% of his AIP Amount;

(3) 100% of his pro-rated AIP Amount (based on the number of days employed during the year of termination);

(4) acceleration and vesting of his outstanding equity awards;

and (5) reimbursement of 24 months of health benefits.

Pursuant to the CIC Plan, following a Change in Control and during the “protection period,” which period extends from the date six months prior to a Change in Control until the date 24 months following the occurrence of a Change in Control, if the Tier 2 NEO’s employment is terminated by the Company without Cause or by him for a CIC Good Reason, he is entitled to (1) 200% of his annual base salary;

(2) 200% of his AIP Amount;

(3) 100% of his pro-rated AIP Amount (based on the number of days employed during the year of termination);

(4) acceleration and vesting of his outstanding equity awards;

and (5) reimbursement of 18 months of health benefits.

In addition, following the Tier 2 NEO’s death or disability, he would be entitled to (1) acceleration and vesting of his outstanding equity awards;

and (2) reimbursement of 12 months of health benefits.

Pursuant to the CIC Plan, if the Tier 2 NEO’s employment with the Company is terminated by the Company without Cause or by him for a Good Reason and not during the applicable protection period, he is entitled to receive (1) 100% of his annual base salary;

(2) 100% of his AIP Amount;

(3) 100% of his pro-rated AIP Amount (based on the number of days employed during the year of termination);

(4) acceleration and vesting of his outstanding equity awards;

and (5) reimbursement of 18 months of health benefits.

Entitlement to the above benefits is conditioned on the timely execution of a general release in the form and substance approved by the Compensation Committee, and each executive’s compliance with non-competition, non-solicitation and confidentiality covenants set forth in the CIC Plan.

In order to be eligible to receive benefits under the CIC Plan, the executives must execute and return to the Company a participation agreement (a “Participation Agreement”) the form of which is attached as Exhibit B to the CIC Plan.

Upon the execution of a Participation Agreement, the executive’s prior employment agreement terminates, and the continued employment of such executive will be on an at-will basis.

On March 6, 2024, Messrs.

McKinney, Baghdati, Brooks, Dyes and Thomas became participants in the CIC Plan upon their delivery to the Company of executed Participation Agreements, pursuant to which the NEOs agreed to terminate the existing employment agreements between them and the Company, effective immediately, and the terms of the CIC Plan and respective Participation Agreements supersede any rights or entitlements to severance benefits under any employment agreement so terminated or other severance arrangements.

The CIC Plan does not affect the NEOs’ eligibility to their base salary, subject to increase at the

discretion of the Board, or the Compensation Committee, and to participate in any and all other standard benefit plans, programs and policies of the Company.

The description of the CIC Plan contained in this Item 9B does not purport to be complete and is qualified in its entirety by reference to the CIC Plan included as Exhibit 10.25 to this Annual Report.

During the quarter ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted , terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference herein from the Company's 2024 Proxy Statement to be filed with the SEC no later than 120 days after December 31, 2023.

The information required by this item, including information on our insider trading policy under the caption " Insider Trading Policy ," is incorporated by reference herein from the Company's 2025 Proxy Statement to be filed with the SEC no later than 120 days after December 31, 2024.

If the Proxy Statement is not filed with the SEC by such time, such information will be included in an amendment to this Annual Report by such time.

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Here-with Furn-ished Here-with

2.1 Purchase and Sale Agreement, dated February 25, 2019 by and among Ring Energy, Inc.

and Wishbone Energy Partners, LLC, Wishbone Texas operating Company LLC and WB WaterWorks, LLC

8-K 001-36057 2.1 2/28/19

2.1 Purchase and Sale Agreement dated July 1, 2022, by and among Ring Energy, Inc., Stronghold Energy II Operating, LLC, a Delaware limited liability company (“Stronghold OpCo”) and Stronghold Energy II Royalties, LP, a Delaware limited partnership, including the following Exhibits thereto:

1 unchanged sentence

8-K 001-36057 2.1 7/8/22

2.2(a) First Amendment to Purchase and Sale Agreement by and among Stronghold Energy II Operating, LLC, Stronghold Energy II Royalties, LP, and Ring Energy, Inc., dated August 4, 2022

2.2 First Amendment to Purchase and Sale Agreement by and among Stronghold Energy II Operating, LLC, Stronghold Energy II Royalties, LP, and Ring Energy, Inc., dated August 4, 2022

8-K 001-36057 2.1 8/9/22

2.3 Asset Purchase Agreement dated July 10, 2023 between Ring Energy, Inc.

and F ounders Oil & Gas IV, LLC .

and Founders Oil & Gas IV, LLC.

2.4 P urchase and Sale Agreement dated as of February 25, 2025 by and among R ing Energy, Inc., Lime Rock Resources IV-A, L.P., and Lime Rock Resources IV-C, L.P.

3.1 Articles of Incorporation (as amended)

10-K 000-53920 3.1 4/1/13

3.1(a) Certificate of Amendment to the Articles of Incorporation, as amended, of Ring Energy, Inc.

3.2 Certificate of Amendment to the Articles of Incorporation, as amended, of Ring Energy, Inc.

8-K 001-36057 3.1 12/17/21

C ertificate of Amendment to the Articles of Incorporation, as amended, of Ring Energy, Inc.

3.3 Certificate of Amendment to the Articles of Incorporation, as amended, of Ring Energy, Inc.

3.4 Bylaws of Ring Energy, Inc.

5 unchanged sentences

8-K 001-36057 3.1 10/31/22

4.1 Registration Rights Agreement, dated April 9, 2019 by and between Ring Energy, Inc.

and Wishbone Energy Partners, LLC

10-Q 001-36057 4.1 4/12/19

4.1 Description of Ring Energy, Inc.

equity securities registered under Section 12(b) of the Securities Exchange Act of 1934, as amended

001-36057 4.2 3/7/24

4.2 Securities Purchase Agreement, dated October 27, 2020

8-K 001-36057 4.1 10/29/20

10.1* Executive Employment and Severance Agreement, dated as of September 30, 2020, by and between the Company and Stephen D.

8-K 001-36957 10.1 12/4/20

Consulting Agreement, dated July 1, 2024 by and between Ring Energy, Inc.

and Stephen D.

8-K 001-36957 10.1 7/3/24

Incorporated by Reference

2 unchanged sentences

Here-with Furn-ished Here-with

10.1* Executive Employment and Severance Agreement, dated as of September 30, 2020, by and between the Company and Stephen D.

8-K 001-36957 10.1 12/4/20

10.2* Executive Employment and Severance Agreement, dated as of September 30, 2020, by and between the Company and Paul D.

9 unchanged sentences

10-Q 000-53920 10.2 8/14/12

10.7 Amended and Restated Credit Agreement with SunTrust Bank

10-Q 001-36057 10.2 5/8/19

10.8 First Amendment to Amended and Restated Credit Agreement with SunTrust Bank

8-K 001-36057 10.1 12/9/19

10.9 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 6/19/20

10.10 Third Amendment to Amended and Restated Credit Agreement with Truist Bank

8-K 001-36057 10.1 12/29/20

10.11 Fourth Amendment to Amended and Restated Credit Agreement with Truist Bank dated June 10, 2021

8-K 001-36057 10.1 6/16/21

10.12 Fifth Amendment to Amended and Restated Credit Agreement with Truist Bank dated June 25, 2021

8-K 001-36057 10.1 6/25/21

Executive Employment and Severance Agreement, dated as of October 26, 2020, by and between the Company and Travis T.

2 unchanged sentences

8-K 001-36057 10.1 9/6/22

10.15 Lock-up Agreement dated August 31, 2022, by and between Ring Energy, Inc.

and Stronghold Energy II Operating, LLC.

8-K 001-36057 10.2 9/6/22

10.9 Director Nomination Agreement dated August 31, 2022, by and among Ring Energy, Inc., Stronghold Energy II Operating, LLC, and Stronghold Energy II Royalties, LP.

8-K 001-36057 10.3 9/6/22

Incorporated by Reference

Number Exhibit Description Form File No.

Exhibit Filing Date Filed

Here-with Furn-ished Here-with

10.10 Second Amended and Restated Credit Agreement dated August 31, 2022, by and among Ring Energy, Inc., Truist Bank, and the Lenders from time to time party thereto

3 unchanged sentences

DEF 14A 001-36057 4/22/21

A mendment No.

Amendment No.

1 to the Ring Energy, Inc.

2021 Om nibus Incentive P l an

2021 Omnibus Incentive Plan

Form of Performance Stock Unit Agreement

5 unchanged sentences

10.16 Form of Warrant Amendment and Exercise Agreement.

10.24 F irst Amendment to Second Amended and Restated Credit Agreement dated as of February 12, 202 4 , by and among Ring Energy, Inc., Truist Bank, as administrative agent, and the Lenders party thereto.

10.25 C hange in Control and Severa nce Benefit Plan

10.17 First Amendment to Second Amended and Restated Credit Agreement dated as of February 12, 2024, by and among Ring Energy, Inc., Truist Bank, as administrative agent, and the Lenders party thereto.

10.18 Change in Control and Severance Benefit Plan

001-36057 10.25 3/7/24

14.1 Code of Ethics

8-K 000-53920 14.1 1/24/13

19.1 I nsider Trading Policy

Incorporated by Reference

Number Exhibit Description Form File No.

Exhibit Filing Date Filed

Here-with Furn-ished Here-with

23.1 Consent of Cawley, Gillespie & Associates, Inc.

5 unchanged sentences

32.2 Section 1350 Certification Chief Financial Officer

97.1 R ing Energy, Inc.

97.1 Ring Energy, Inc.

Clawback Policy

001-36057 97.1 3/7/24

99.1 Reserve Report of Cawley, Gillespie & Associates, Inc.

4 unchanged sentences

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X

Incorporated by Reference

Number Exhibit Description Form File No.

Exhibit Filing Date Filed

Here-with Furn-ished Here-with

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X

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Chief Financial Officer Director

(Principal Financial Officer) Date:

(Principal Financial Officer and Principal Accounting Officer)

March 5, 2025

/s/ Regina Roesener /s/ Clayton E.

/s/ Regina Roesener /s/ John A.

Regina Roesener Mr.

3 unchanged sentences

/s/ Richard E.

Harris /s/ John A.

Director Director

March 7, 2024

Ben-Dor /s/ David S.

Harris /s/ David S.

Director Director

4 unchanged sentences

Report of Grant Thornton LLP Independent Registered Public Accounting Firm (PCAOB ID Number 248 )

Balance Sheets as of December 31, 202 3 and 202 2

Statements of Operations for the years ended December 31, 202 3 , 202 2 , and 202 1

Statements of Stockholders’ Equity for the years ended December 31, 202 3 , 202 2 , and 202 1

Statements of Cash Flows for the years ended December 31, 202 3 , 202 2 , and 202 1

Balance Sheet s as of December 31, 2024 and 2023

Statement s of Operations for the years ended December 31, 2024, 2023, and 2022

Statement of Stockholders’ Equity for the years ended December 31, 2024, 2023, and 2022

Statement s of Cash Flows for the years ended December 31, 2024, 2023, and 2022

Notes to Financial Statements

Supplemental Information on Oil and Natural Gas Producing Activities

Supplemental Information on Oil and Natural Gas Producing Activities (Unaudited)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

6 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 5, 2025 expressed an unqualified opinion.

Change in accounting principle

As discussed in Note 15 to the financial statements, the Company has adopted new accounting guidance in 2024 related to the disclosure of segment information in accordance with ASU 2023-07, Segment Reporting (Topic 280) .

The adoption was retrospectively applied to 2023 and 2022.

Basis for opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The development of estimated proved crude oil and natural gas reserves used in the calculation of depletion, depreciation and amortization expense under the full cost method of accounting

As described further in Note 1 to the financial statements, the Company accounts for its oil and gas properties using the full cost method of accounting, which requires management to make estimates of proved crude oil and natural gas reserve volumes and future net revenues to record depletion, depreciation and amortization expense.

To estimate the volume of proved crude oil and natural gas reserves and future net revenue, management makes significant estimates and assumptions including forecasting the production decline rate of producing properties and forecasting the timing and volume of production associated with the Company’s development plan for proved undeveloped properties.

In addition, the estimation of proved crude oil and natural gas reserves is impacted by management’s judgments and estimates regarding the financial performance of wells associated with proved crude oil and natural gas reserves to determine if wells are expected, with reasonable certainty, to be economical under the appropriate pricing assumptions required in the estimation of depletion,

depreciation and amortization expense.

As described further in Note 1 to the financial statements, the Company accounts for its oil and gas properties using the full cost method of accounting, which requires management to make estimates of proved crude oil and natural gas reserve volumes and future development costs to calculate and record depletion, depreciation and amortization expense.

To estimate the volume of proved crude oil and natural gas reserves and future development costs, management makes significant estimates and assumptions including forecasting the production decline rate of producing properties and forecasting the timing and volume of production associated with the Company’s development plan for proved undeveloped properties.

determine if wells are expected, with reasonable certainty, to be economical under the appropriate pricing assumptions required in the estimation of depletion, depreciation and amortization expense.

We identified the estimation of proved reserves of oil and gas properties as a critical audit matter.

The principal consideration for our determination that the estimation of proved crude oil and natural gas reserves is a critical audit matter is that changes in certain inputs and assumptions, which require a high degree of subjectivity, necessary to estimate the volume and future net revenues of the Company’s proved reserves could have a significant impact on the measurement of depletion, depreciation and amortization expense.

The principal consideration for our determination that the estimation of proved crude oil and natural gas reserves is a critical audit matter is that changes in certain inputs and assumptions, which require a high degree of subjectivity, necessary to estimate the volume and future development costs of the Company’s proved reserves could have a significant impact on the measurement of depletion, depreciation and amortization expense.

In turn, auditing those inputs and assumptions required subjective and complex auditor judgment.

1 unchanged sentence

• We tested the design and operating effectiveness of controls relating to management’s estimation of proved crude oil and natural gas reserves for the purpose of estimating depletion, depreciation and amortization expense.

• We evaluated the independence, objectivity, and professional qualifications of the Company’s reserve engineers, made inquiries of those specialists regarding the process followed and judgments made to estimate the Company’s proved crude oil and natural gas reserve volumes, and read the reserve report prepared by the Company’s specialists.

• To the extent key inputs and assumptions used to determine proved reserve volumes and other cash flow inputs and assumptions are derived from the Company’s accounting records, including, but not limited to:

historical pricing differentials, operating costs, estimated capital costs, and ownership interests, we tested management’s process for determining the assumptions, including examining the underlying support on a sample basis.

historical pricing differentials, operating costs, estimated future development costs, and ownership interests, we tested management’s process for determining the assumptions, including examining the underlying support on a sample basis.

Specifically, our audit procedures involved testing management’s assumptions by performing the following:

2 unchanged sentences

◦ We evaluated the method used to determine the estimated future development costs used in the reserve report and compared management’s estimates to amounts expended for recently drilled and completed wells;

◦ We tested the working and net revenue interests used in the reserve report by inspecting land, legal and division order records.

◦ We evaluated evidence supporting the amount of proved undeveloped properties reflected in the reserve report by examining historical conversion rates and support for the Company’s ability to fund and intent to develop the proved undeveloped properties, and

◦ We tested, on a sample basis, the working and net revenue interests used in the reserve report by inspecting land, legal and division order records;

◦ We applied analytical procedures to production forecasts in the reserve report by comparing to historical actual results.

29 unchanged sentences

Accounts payable $ 95,729,261 $ 104,064,124

Income tax liability 328,985 —

Financing lease liability 906,119 956,254

2 unchanged sentences

Notes payable 496,397 533,734

Deferred cash payment — 14,807,276

Asset retirement obligations 517,674 165,642

18 unchanged sentences

Additional paid-in capital 800,419,719 795,834,675

Accumulated deficit ( 9,448,612 ) ( 114,313,253 )

Retained earnings (Accumulated deficit) 58,021,702 ( 9,448,612 )

Total Stockholders’ Equity 858,639,982 786,582,900

21 unchanged sentences

Gain (loss) on derivative contracts ( 2,365,917 ) 2,767,162 ( 21,532,659 )

Loss on disposal of assets

( 87,128 ) — —

Gain (loss) on disposal of assets 89,693 ( 87,128 ) —

Other income 106,656 198,935 —

1 unchanged sentence

Income Before Provision for Income Taxes 87,911,268 104,989,883 147,043,749

104,989,883 147,043,749 3,413,234

Provision for Income Taxes ( 20,440,954 ) ( 125,242 ) ( 8,408,724 )

$ 67,470,314 $ 104,864,641 $ 138,635,025

$ 104,864,641 $ 138,635,025 $ 3,322,892

Basic Earnings per Share

4 unchanged sentences

RING ENERGY, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

STATEMENT OF STOCKHOLDERS’ EQUITY

Common Stock Additional

4 unchanged sentences

Balance, December 31, 2021 100,192,562 $ 100,193 $ 553,472,292 $ ( 252,948,278 ) $ 300,624,207

Common stock and warrants issued for cash, net — — ( 65,000 ) — ( 65,000 )

Exercise of pre-funded warrants issued in offering 13,428,500 13,429 — — 13,429

Exercise of common warrants issued in offering 10,253,907 10,254 8,192,872 — 8,203,126

442,600 443 353,637 — 354,080

Options exercised 100,000 100 ( 100 ) — —

100,000 100 199,900 — 200,000

Shares elected to be withheld for options exercised ( 47,506 ) ( 48 ) 48 — —

Restricted stock vested 1,310,894 1,311 ( 1,311 ) — —

Shares to cover tax withholdings for restricted stock vested ( 168,523 ) ( 169 ) 169 — —

( 132,182 ) ( 132 ) 132 — —

Payments to cover tax withholdings for restricted stock vested, net — — ( 521,199 ) — ( 521,199 )

— — ( 385,330 ) — ( 385,330 )

Common stock issuance for Stronghold Acquisition 21,339,986 21,340 69,120,215 — 69,141,555

Conversion of mezzanine preferred shares for Stronghold Acquisition 42,548,892 42,549 137,815,897 — 137,858,446

Share-based compensation — — 7,162,231 — 7,162,231

— — — 3,322,892 3,322,892

Net income — — — 138,635,025 138,635,025

Balance, December 31, 2022 175,530,212 $ 175,530 $ 775,241,114 $ ( 114,313,253 ) $ 661,103,391

Exercise of common warrants issued in offering 4,517,427 $ 4,517 $ 3,609,424 $ — $ 3,613,941

Options exercised 100,000 100 ( 100 ) — —

Shares elected to be withheld for options exercised

( 47,506 ) ( 48 ) 48 — —

Induced exercise of common warrants issued in offering 14,512,166 14,512 8,673,143 — 8,687,655

Restricted stock vested 1,680,232 1,680 ( 1,680 ) — —

Shares to cover tax withholdings for restricted stock vested ( 288,152 ) ( 287 ) 287 — —

( 168,523 ) ( 169 ) 169 — —

Payments to cover tax withholdings for restricted stock vested, net — — ( 520,153 ) — ( 520,153 )

— — ( 521,199 ) — ( 521,199 )

Common stock issuance for Stronghold Acquisition

21,339,986 21,340 69,120,215 69,141,555

Conversion of mezzanine preferred shares for Stronghold Acquisition

42,548,892 42,549 137,815,897 137,858,446

Performance stock vested 1,170,024 1,170 ( 1,170 ) — —

Shares to cover tax withholdings for performance stock vested ( 284,908 ) ( 285 ) 285 — —

Share-based compensation — — 8,833,425 — 8,833,425

— — — 138,635,025 138,635,025

Net income — — — 104,864,641 104,864,641

Balance, December 31, 2023 196,837,001 $ 196,837 $ 795,834,675 $ ( 9,448,612 ) $ 786,582,900

Exercise of common warrants issued in offering 4,517,427 4,517 3,609,424 — 3,613,941

Induced exercise of common warrants issued in offering

14,512,166 14,512 8,673,143 — 8,687,655

Restricted stock vested 1,688,317 1,688 ( 1,688 ) — —

20 unchanged sentences

Share-based compensation 5,506,017 8,833,425 7,162,231

Bad debt expense 134,007 242,247 —

Credit loss expense 160,847 134,007 242,247

(Gain) loss on disposal of assets ( 89,693 ) — —

Deferred income tax expense (benefit) 19,935,413 ( 425,275 ) 8,720,992

1 unchanged sentence

(Gain) loss on derivative contracts 2,365,917 ( 2,767,162 ) 21,532,659

Cash paid for derivative settlements, net

( 9,084,920 ) ( 62,525,954 ) ( 52,768,154 )

Cash received (paid) for derivative settlements, net ( 5,193,673 ) ( 9,084,920 ) ( 62,525,954 )

Changes in operating assets and liabilities:

3 unchanged sentences

Accounts payable ( 5,076,738 ) ( 1,451,422 ) 50,808,461

Settlement of asset retirement obligation ( 1,862,385 ) ( 2,741,380 ) ( 2,186,832 )

Asset retirement obligation ( 1,588,480 ) ( 1,862,385 ) ( 2,741,380 )

Net Cash Provided by Operating Activities 194,423,712 198,170,459 196,976,729

6 unchanged sentences

Payments to acquire or improve fixed assets subject to depreciation ( 185,524 ) ( 492,317 ) ( 319,945 )

Sale of fixed assets subject to depreciation 332,229 134,600 —

Proceeds from sale of fixed assets subject to depreciation 10,605 332,229 134,600

Proceeds from divestiture of oil and natural gas properties 121,232 1,554,558 23,700

3 unchanged sentences

( 144,398 ) 3,891,757 —

Proceeds from sale of CBP vertical wells 5,500,000 — —

Net Cash Used in Investing Activities

4 unchanged sentences

Proceeds from issuance of common stock and warrants — 12,301,596 8,203,126

Proceeds from option exercise — — 200,000

Payments for taxes withheld on vested restricted shares, net

14 unchanged sentences

Cash paid for income taxes

72,213 72,213 —

Noncash Investing and Financing Activities

4 unchanged sentences

Operating lease assets obtained in exchange for new operating lease liability — 1,713,677 754,894

Operating lease asset revision — — ( 621,636 )

Financing lease assets obtained in exchange for new financing lease liability 894,996 952,101 —

Financing lease assets obtained in exchange for new financing lease liability, net (1)

738,240 894,996 952,101

Change in capitalized expenditures attributable to drilling projects financed through current liabilities

36 unchanged sentences

Convertible preferred stock issued for acquisition — — 137,858,446

(1) Included within the financing lease assets obtained in exchange for new financing lease liability, net, is $ 45,436 of finance lease asset terminations for the year ended December 31, 2024.

The accompanying notes are an integral part of these financial statements.

8 unchanged sentences

Note 12 — Employee Stock Options, Restricted Stock Award Plan, and 401(k)

Note 4 — Earn ings Per Share Information

Note 13 — Related Party Transactions

Note 5 — Acquisitions & Divestitures

Note 4 — Earnings Per Share Information

Note 13 — Commitments and Contingencies

Note 6 — Oil and Natural Gas Producing Activities

Note 5 — Acquisitions & Divestitures

Note 14 — Income Taxes

Note 6 — Oil and Natural Gas Producing Activities

Note 15 - Segment Reporting

Note 7 — Derivative Financial Instruments

3 unchanged sentences

Note 9 — Revolving Line of Credit

Supplemental Information on Oil and N atural Gas Producing Activities (Unaudited)

Supplemental Information on Oil and Natural Gas Producing Activities (Unaudited)

NOTE 1 — ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations – Ring Energy, Inc., a Nevada corporation (“Ring,” “Ring Energy,” the “Company,” “we,” “us,” “our,” or similar terms), is a growth oriented independent oil and natural gas exploration and production company based in The Woodlands, Texas and is engaged in oil and natural gas development, production, acquisition, and exploration activities currently focused in the Permian Basin of Texas.

Organization and Nature of Operations – Ring Energy, Inc., a Nevada corporation (“Ring,” “Ring Energy,” the “Company,” “we,” “us,” “our,” or similar terms), is a growth oriented independent oil and natural gas exploration and production company based in The Woodlands, Texas engaged in oil and natural gas development, production, acquisition, and exploration activities currently focused in the Permian Basin of Texas.

Our drilling operations target the oil and liquids rich producing formations in the Northwest Shelf and the Central Basin Platform, in the Permian Basin in Texas.

5 unchanged sentences

Extended depressed oil prices have historically had and could have a material adverse impact on the Company’s oil revenue, which is mitigated to some extent by the Company’s hedge contracts.

The Company is always mindful of oil price volatility and its impact on our liquidity.

The Company believes that it has the ability to continue to fund its operations and service its debt by using cash flows from operations.

5 unchanged sentences

Fair Value Measurements – Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).

The Financial Accounting Standards Board (“FASB”) has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure

The Financial Accounting Standards Board (“FASB”) has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

This hierarchy consists of three broad levels.

Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities.

Level 1 inputs are the highest priority and consist of unadjusted

quoted prices in active markets for identical assets and liabilities.

Level 2 are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

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Concentration of Credit Risk and Receivables – Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and receivables.

Cash and cash equivalents - The Company has cash in excess of federally insured limits of $ 46,384 and $ 3,462,526 as of December 31, 2023 and 2022, respectively.

Cash and cash equivalents – The Company had cash in excess of federally insured limits of $ 1,616,395 and $ 46,384 as of December 31, 2024 and 2023, respectively.

The Company places its cash with a high credit quality financial institution.

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The Company recorded no imbalances as of December 31, 2024 or 2023.

Joint interest billing receivables, net - The Company also has a joint interest billing receivable.

Joint interest billing receivables, net – The Company also has joint interest billing receivables.

Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself.

Receivables from joint interest owners outstanding longer than the contractual payment terms are considered past due.

The following table indicates the Company's provisions for bad debt expense associated with its joint interest billing receivables during the years ended December 31, 2023, 2022, and 2021.

The following table indicates the Company's provisions for credit loss expense associated with its joint interest billing receivables during the years ended December 31, 2024, 2023, and 2022.

For the Years Ended December 31,

2024 2023 2022

Bad debt expense $ 134,007

Credit loss expense $ 160,847

The following table reflects the Company's joint interest billing receivables and allowance for credit losses as of December 31, 2024 and 2023.

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$ 1,083,164 $ 2,422,274

The reduction of $ 183,678 in the allowance for credit losses during the year ended December 31, 2023 was primarily due to a clearing of $ 105,620 in allowances that were associated with the Delaware Basin asset sale.

The increase of $ 123,164 in the allowance for credit losses during the year ended December 31, 2024 was primarily due to property sales and owner settlements.

Cash and Cash Equivalents – The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

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Depletion rate, per barrel-of-oil-equivalent (Boe) $ 13.52 $ 13.22 $ 12.19

In addition, capitalized costs less accumulated depreciation, depletion and amortization and related deferred income taxes are not allowed to exceed an amount (the full cost ceiling) equal to the sum of:

In addition, capitalized costs less accumulated depletion and related deferred income taxes are not allowed to exceed an amount (the full cost ceiling) equal to the sum of:

1) the present value of estimated future net revenues discounted at ten percent computed in compliance with SEC guidelines;

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Land, Buildings, Equipment, Software, Leasehold Improvements, Automobiles, Buildings and Structures – Land, buildings, equipment, software, leasehold improvements, automobiles, buildings and structures are carried at historical cost, adjusted for impairment loss and accumulated depreciation (except for land).

Historical costs include all direct costs associated with the acquisition of land, buildings, equipment, software, leasehold improvements, automobiles, buildings and structures and placing them in service.

Historical costs include all direct costs associated with the acquisition of land, buildings, equipment, software, leasehold improvements, automobiles, buildings

and structures and placing them in service.

Upon sale or abandonment, the cost of the fixed asset(s) and related accumulated depreciation are removed from the accounts and any gain or loss is recognized.

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Depreciation expense

During the year ended December 31, 2023, the Company sold some of its automobiles, and recognized a loss on disposal of $ 87,128 .

During the year ended December 31, 2023, the Company sold some of its owned vehicles, driving the loss on disposal of 87,128 .

Accounts Payable

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$ 20,672,841 $ 22,088,838

Notes Payable – At the end of May 2023, the Company renewed its control of well, general liability, pollution, umbrella, property, workers' compensation, auto, and D&O (directors and officers) insurance policies, and funded the premiums with a promissory note with a total face value after down payments of $ 1,565,071 .

Notes Payable – At the end of May 2024, the Company renewed its control of well, general liability, pollution, umbrella, property, workers' compensation, auto, and D&O insurance policies, funding the premiums with a promissory note with a face value after down payments of $ 1,501,507 .

In November 2024, the Company renewed its cybersecurity insurance policy, and funded the premium with a promissory note with a face value after down payments of $ 58,773 .

The APR for both notes was 7.98 %.

At the end of May 2023, the Company renewed its control of well, general liability, pollution, umbrella, property, workers' compensation, auto, and D&O (directors and officers) insurance policies, and funded the premiums with a promissory note with a total face value after down payments of $ 1,565,071 .

In November 2023, the Company renewed its cybersecurity insurance policy, and funded the premium with a promissory note with a total face value after down payments of $ 72,442 .

The annual percentage rate (APR) for both notes is 7.08 %.

As of December 31, 2023, the notes payable balance included within current liabilities on the balance sheet is $ 533,734 .

The weighted average notes payable balance during the years ended December 31, 2023 and 2022 were $ 687,456 and $ 593,766 , respectively.

The average interest on the weighted average notes payable balance during the years ended December 31, 2023 and 2022 were 7.23 % and 4.31 %, respectively.

The annual percentage rate (APR) for both notes was 7.08 %.

As of December 31, 2024 and 2023, the notes payable balances included within current liabilities on the balance sheets were $ 496,397 and $ 533,734 , respectively.

The following table reflects the weighted average notes payable balances and the weighted average interest rate on the weighted average notes payable outstanding during the period as of and for the years ended December 31, 2024, 2023, and 2022.

For the Years Ended December 31,

2024 2023 2022

Weighted average notes payable balance $ 651,789 $ 687,456 $ 593,766

Weighted average interest rate on weighted average notes payable 8.63 % 7.23 % 4.31 %

The following table shows interest paid related to notes payable for the years ended December 31, 2024, 2023, and 2022.

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Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes.

Deferred income taxes are provided on differences between the tax basis of assets and liabilities and their carrying amounts in the financial statements, and tax carryforwards.

Deferred income taxes are provided on differences between the tax basis of assets and liabilities and their carrying

amounts in the financial statements, and tax carryforwards.

Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

Since December 31, 2020, the Company determined that a full valuation allowance was necessary due to the Company's assessment that it was more likely than not that it would be unable to obtain the benefits of its deferred tax assets due to the Company’s history of taxable losses.

The Company determined that certain existing deferred tax assets would not be offset

by existing deferred tax liabilities as a result of the 80% limitation on the utilization of net operating losses incurred after 2017.

Since 2021, commodity prices increased and the Company continues to project positive pre-tax book income.

As of June 30, 2023, the Company was no longer in a cumulative loss position.

As a result, future forecasted pre-tax book income was considered as positive evidence in assessing the valuation allowance.

Based on the change in judgment on the realizability of the related federal deferred tax assets in future years, the Company released $ 24.2 million of valuation allowance as a benefit during the year ended December 31, 2023.

The Company recorded the following federal and state income tax benefits (provisions) for the years ended December 31, 2023, 2022, and 2021.

The Company recorded the following federal and state income tax provisions for the years ended December 31, 2024, 2023, and 2022.

For the Years Ended December 31,

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Deferred federal income tax benefit (provision) $ ( 19,096,010 ) $ 901,522 $ ( 6,437,680 )

Current state income tax provision ( 72,213 ) — —

Deferred state income tax provision ( 954,551 ) ( 1,971,044 ) ( 90,342 )

Current state income tax benefit (provision) ( 401,197 ) ( 72,213 ) —

Deferred state income tax benefit (provision) ( 943,747 ) ( 954,551 ) ( 1,971,044 )

Provision for Income Taxes $ ( 20,440,954 ) $ ( 125,242 ) $ ( 8,408,724 )

The Company’s overall effective tax rates (calculated as Provision for Income Taxes divided by Income Before Provision for Income Taxes) for the years ended December 31, 2023, 2022, and 2021 were as follows.

The Company’s overall effective tax rates are calculated as Provision for Income Taxes divided by Income Before Provision for Income Taxes.

The effective tax rates for the years ended December 31, 2024, 2023, and 2022 were as follows.

For the Years Ended December 31,

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23.3 % 0.1 % 5.7 %

These rates were primarily impacted by the release of valuation allowance on the Company's federal net deferred tax asset.

(1) The effective tax rate for the year ended December 31, 2023 was impacted by the release of valuation allowance on the Company's federal net deferred tax asset.

A tax benefit of $ 24.2 million was recorded in the year ended December 31, 2023.

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This represents a change in our accounting and reporting presentation necessitated by a change in the underlying facts and circumstances surrounding the Stronghold Acquisition, as Stronghold has historically reported its revenues on a three-stream basis.

As clarified in the interpretive guidance of ASC 250, such changes should not be applied on a retrospective basis.

As clarified in the interpretive guidance of Accounting Standards Codification ("ASC") 250, such changes should not be applied on a retrospective basis.

Accordingly, we began reporting on a three-stream basis prospectively, beginning July 1, 2022.

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The Company did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date.

Earnings (Loss) Per Share – Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the year.

Earnings (Loss) Per Share – Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the applicable period.

Diluted earnings (loss) per share are calculated to give effect to potentially issuable dilutive common shares.

Major Purchasers – During the year ended December 31, 2024, sales to three purchasers represented 61 %, 14 %, and 13 %, respectively, of total oil, natural gas, and natural gas liquids sales.

As of December 31, 2023, sales outstanding from these three purchasers represented 65 %, 11 %, and 8 %, respectively, of accounts receivable.

As of December 31, 2024, sales outstanding from these three purchasers represented 64 %, 11 %, and 11 %, respectively, of accounts receivable from purchasers.

During the year ended December 31, 2023, sales to three purchasers represented 66 %, 12 %, and 10 %, respectively, of total oil, natural gas and natural gas liquids sales.

As of December 31, 2022, sales outstanding from these three purchasers represented 69 %, 7 %, and 10 %, respectively, of accounts receivable.

During the year ended December 31, 2021, sales to three purchasers represented 76 %, 7 %, and 6 %, respectively, of total oil and natural gas sales.

As of December 31, 2021, sales outstanding from these three purchasers represented 75 %, 8 %, and 4 %, respectively, of accounts receivable.

Share-Based Employee Compensation – The Company has outstanding stock option grants and restricted stock unit awards to directors, officers and employees, which are described more fully below in "Note 12 — EMPLOYEE STOCK OPTIONS, RESTRICTED STOCK AWARD PLAN, AND 401(K)".

As of December 31, 2023, sales outstanding from these three purchasers represented 65 %, 11 %, and 8 %, respectively, of accounts receivable from purchasers.

During the year ended December 31, 2022, sales to three purchasers represented 68 %, 13 %, and 5 %, respectively, of total oil, natural gas, and natural gas liquids sales.

As of December 31, 2022, sales outstanding from these three purchasers represented 69 %, 7 %, and 10 %, respectively, of accounts receivable from purchasers.

Share-Based Employee Compensation – The Company has outstanding stock option grants, restricted stock unit awards, and performance stock unit awards to directors, officers and employees, which are described more fully below in "NOTE 12 — EMPLOYEE STOCK OPTIONS, RESTRICTED STOCK AWARD PLAN, AND 401(K)".

The Company recognizes the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the related compensation expense over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period.

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The total Gain (loss) on derivative contracts less the Cash received (paid) for derivative settlements, net represents the unrealized (mark to market) gain or loss on derivative contracts.

Recently Adopted Accounting Pronouncements – In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”).

2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurement.

ASU 2018-13 became effective for annual and interim periods beginning January 1, 2020.

ASU 2018-13 requires that the additional disclosure requirements be adopted using a retrospective approach.

The adoption of this guidance did not have a material impact on the Company’s financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, followed by other related ASUs that provided targeted improvements (collectively “ASU 2016-13”).

ASU 2016-13 provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

The guidance is to be applied using a modified retrospective method and became effective for fiscal years beginning after December 15, 2019.

The Company adopted ASU 2016-13 on January 1, 2020.

The adoption of ASU 2016-13 did not have a material impact to the Company’s financial statements or disclosures.

In December 2019, the FASB released ASU No.

2019-12 (“ASU 2019-12”), Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.

The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.

The amended standard became effective for fiscal years beginning after December 15, 2020.

The adoption of ASU 2019-12 did not have a material impact to the Company’s financial statements or disclosures.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements ("ASU 2020-10"), which clarifies or improves disclosure requirements for various topics to align with SEC regulations.

This update was effective for the Company beginning in the first quarter of 2021 and was applied retrospectively.

The adoption and implementation of this ASU did not have a material impact on the Company’s financial statements.

Recently Adopted Accounting Pronouncements – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provided optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that referenced LIBOR ("London Inter-Bank Offered Rate") or another rate.

ASU 2020-04 was in effect through December 31, 2022.

In January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848):

Scope (“ASU 2021-01”), to provide clarifying guidance regarding the scope of Topic 848.

ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

In December 2022, the FASB issued ASU 2022-06, " Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848" ("ASU 2022-06"), wh ich defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

The Company adopted ASU 2020-04 with an effective date of January 1, 2024.

Beginning August 31, 2022, under the Company's Second Amended and Restated Credit Agreement, the Company's interest rates were transitioned from the LIBOR to the SOFR reference rate.

At this time, the Company does not plan to enter into additional contracts using LIBOR as a reference rate.

As such, the adoption and implementation of this ASU did not have a material impact on the Company’s financial statements.

In August 2020, the FASB issued ASU No.

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120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock .

The ASU provided updated views from the SEC Staff on employee and non-employee share-based payment accounting, including guidance related to spring-loaded awards.

Income or Loss Applicable to Common Stock ." The ASU provided updated views from the SEC Staff on employee and non-employee share-based payment accounting, including guidance related to spring-loaded awards.

As the ASU did not provide any new ASC guidance, and there was no transition or effective date provided, the Company adopted this standard upon issuance, and the adoption did not have a material impact on the Company's financial statements.

Recent Accounting Pronouncements – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

ASU 2020-04 was in effect through December 31, 2022.

In January 2021, the FASB issued ASU No.

2021-01, Reference Rate Reform (Topic 848):

Scope (“ASU 2021-01”), to provide clarifying guidance regarding the scope of Topic 848.

ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the

effects of) reference rate reform on financial reporting.

In December 2022, the FASB issued ASU 2022-06, " Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848" ("ASU 2022-06"), wh ich defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

Beginning August 31, 2022, under the Company's Second Amended and Restated Credit Agreement, the Company's interest rates were transitioned from the LIBOR to the SOFR reference rate.

At this time, the Company does not plan to enter into additional contracts using LIBOR as a reference rate.

In October 2023, the FASB issued ASU 2023-06, " Disclosure Improvements:

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ." This update modifies the disclosure or presentation requirements of a variety of Topics in the Codification, which should be applied prospectively.

For instance, within ASC 230-10 Statement of Cash Flows - Overall, the amendment requires an accounting policy disclosure in annual periods of where cash flows associated with their derivative instruments and their related gains and losses are presented in the statement of cash flows.

Additionally, within ASC 260-10 Earnings Per Share - Overall, the amendment requires disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security and clarifies that certain disclosures should be made during interim periods.

The Company is currently assessing the impact of this update on its financial statements and related notes.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

In November 2023, the FASB issued ASU 2023-07 " Segment Reporting (Topic 280):

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Finally, the update requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures in Topic 280.

The Company is currently assessing the impact of adopting this new guidance on its financial disclosures.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments in this update became effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 effective January 1, 2024.

Recent Accounting Pronouncements – In October 2023, the FASB issued ASU 2023-06, " Disclosure Improvements:

prospectively.

For instance, within ASC 230-10 Statement of Cash Flows – Overall, the amendment requires an accounting policy disclosure in annual periods of where cash flows associated with their derivative instruments and their related gains and losses are presented in the statement of cash flows.

Additionally, within ASC 260-10 Earnings Per Share – Overall, the amendment requires disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security and clarifies that certain disclosures should be made during interim periods.

The Company is currently assessing the impact of this update on its financial statements and related notes.

In December 2023, the FASB issued ASU 2023-09 " Income Taxes (Topic 740):

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For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024.

In March 2024, the FASB issued ASU 2024-02 " Codification Improvements – Amendments to Remove References to the Concepts Statements " ("ASU 2024-02"), which contains amendments to the Codification to remove references to various FASB Concepts Statements.

In most instances, the references are extraneous and not required to understand or apply the guidance.

Generally, ASU 2024-02 is not intended to result in significant accounting changes for most entities.

ASU 2024-02 is effective for the Company for fiscal years beginning after December 15, 2024.

The Company does not expect this update to have a material impact on its financial statements.

In November 2024, the FASB issued ASU 2024-03, " Income Statement - Reporting Comprehensive Income - Expenses Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses" ("ASU 2024-03").

The purpose of this update is to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods with annual reporting periods beginning after December 15, 2027, with early adoption permitted, and either prospective or retrospective application permitted.

The Company is currently assessing the impact of adopting this new guidance on its financial disclosures.

NOTE 2 — REVENUE RECOGNITION

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The contractual performance obligation is satisfied when the product is delivered to the purchaser.

Revenue is recorded in the

month the product is delivered to the purchaser.

Revenue is recorded in the month the product is delivered to the purchaser.

The Company receives payment from one to three months after delivery.

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Under the Company’s sales contracts, each unit of production delivered to a purchaser represents a separate performance obligation, therefore, future volumes to be delivered are wholly unsatisfied and disclosure of transaction price allocated to remaining performance obligation is not required.

The transaction price includes variable consideration as product pricing is based on published market prices and adjusted for contract specified differentials such as quality, energy content, and transportation.

The transaction price includes variable consideration as product pricing is based on published

market prices and adjusted for contract specified differentials such as quality, energy content, and transportation.

The guidance does not require that the transaction price be fixed or stated in the contract.

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Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange for those products.

Once consideration is received from the purchaser, the Company records any variances between the estimates and actual amounts, which has historically not been significant.

Under the Company’s oil sales contracts, the Company sells oil production at the point of delivery and collects an agreed upon index price, net of pricing differentials.

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However, the Company maintained ownership of the gas through processing and received proceeds from the marketing of the resulting products.

Under this processing agreement, the Company recognized the fees associated with the processing as an expense rather than netting these costs against Oil and Natural Gas Revenues in the Statements of Operations.

Under this processing agreement, the Company recognized the fees associated with the processing as an expense rather than netting these costs against Oil, Natural Gas, and Natural Gas Liquids Revenues in the Statements of Operations.

Beginning May 1, 2022, these contracts were combined into one contract, and it was modified so that the Company no longer maintained ownership of the gas through processing.

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Disaggregation of Revenue.

The following table presents revenues disaggregated by product:

The following table presents revenues disaggregated by product for the years ended December 31, 2024, 2023, and 2022.

For the years ended December 31,

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For periods prior to July 1, 2022, sales revenues for NGLs were presented with natural gas.

(2) In 2024, the Company experienced a net negative total gas revenue, due to the significant reduction in gross realized sales prices per Mcf, coupled with the growth in the plant fees per Mcf.

NOTE 3 — LEASES

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The Midland office is under a five-year lease which began January 1, 2021.

The Midland office lease was amended effective October 1, 2022, with the revised five-year lease ending September 30, 2027.

The Midland office lease was amended effective October 1, 2022,

with the revised five-year lease ending September 30, 2027.

Beginning January 15, 2021, the Company entered into a five-and-a-half-year sub-lease for office space in The Woodlands, Texas;

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On September 27, 2023, the Company provided a certificate of acceptance of premises to the lessor of the additional office space, and accordingly, the future payments for this space are included along with the other operating leases, reflected in the future lease payments schedule below.

During the first quarter of 2021, the Company had an operating lease with Arenaco, LLC for its Tulsa, Oklahoma office.

The Tulsa lease was terminated as of March 31, 2021, with payments made until the end of February 2021.

Refer to "Note 13 — RELATED PARTY TRANSACTIONS" for further details.

The Company has month to month leases for office equipment and compressors used in its operations on which the Company has elected to apply ASU 2016-02 (i.e.

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The Company has financing leases for vehicles.

These leases have a term of 36 months at the end of which the Company owns the vehicles.

These leases have an initial term of 36 months at the end of which the Company owns the vehicles.

These vehicles are generally sold at the end of their term and the proceeds applied to a new vehicle.

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Undiscounted future cash flows less imputed interest 1,553,197 1,862,584

The following table provides supplemental information regarding lease costs in the Statements of Operations:

The following table provides supplemental information regarding lease costs in the Statements of Operations for the years ended December 31, 2024, 2023, and 2022.

2024 2023 2022

Operating lease costs $ 700,362 $ 541,801 $ 363,908

Short-term lease costs (1)

$ 4,083,088 $ 5,096,723 $ 2,618,405

Financing lease costs:

Amortization of financing lease assets (2)

$ 1,058,398 $ 803,721 $ 505,211

Interest on financing lease liabilities (3)

$ 121,293 $ 101,269 $ 48,472

(1) Amount included in Lease operating expenses

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(3) Amount included in Interest (expense)

During the year ended December 31, 2024, the Company sold some of its leased vehicles, driving the gain on disposal of $ 89,693 .

NOTE 4 — EARNINGS PER SHARE INFORMATION

The following table presents the calculation of the Company's basic and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021.

The following table presents the calculation of the Company's basic and diluted earnings (loss) per share for the years ended December 31, 2024, 2023 and 2022.

For all dilutive securities, the treasury stock method of calculating the incremental shares is applied.

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NOTE 5 — ACQUISITIONS & DIVESTITURES

Andrews County Sale and Exchange

The Company entered into a Purchase, Sale and Exchange Agreement effective January 1, 2021, with an unrelated party, covering the sale and exchange of certain oil and gas interests in Andrews County, Texas.

Upon closing, the Company received cash consideration of $ 2,000,000 and reduced the Company’s asset retirement obligations by $ 2,934,126 for the properties sold and added $ 662,705 of asset retirement obligations for the wells acquired.

Stronghold Acquisition

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Fair value of deferred payment liability 14,807,276

Post-close settlement to be paid to Stronghold 3,511,170

Post-close settlement paid to Stronghold 3,511,170

Fair value of consideration paid to seller 393,980,091

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On July 10, 2023, the Company, as buyer, and Founders Oil & Gas IV, LLC (“Founders”), as seller, entered into an Asset Purchase Agreement (the “Founders Purchase Agreement”).

Pursuant to the closing of the Purchase Agreement, on August 15, 2023 the Company acquired (the “Founders Acquisition”) interests in oil and gas leases and related property of Founders located in the Central Basin Platform of the Texas Permian Basin in Ector County, Texas, for a purchase price (the “Purchase Price”) of (i) a cash deposit of $ 7.5 million paid on July 11, 2023 into a third-party escrow account as a deposit pursuant to the Founders Purchase Agreement, (ii) approximately $ 42.5 million in cash paid on the closing date, net of approximately $ 10 million of preliminary and customary purchase price adjustments with an effective date of April 1, 2023, and (iii) a deferred cash payment of approximately $ 11.9 million paid on December 18, 2023, net of customary purchase price adjustments.

The Founders Acquisition has been accounted for as an asset acquisition in accordance with ASC 805.

Pursuant to the closing of the Purchase Agreement, on August 15, 2023 the Company acquired (the “Founders Acquisition”) interests in oil and gas leases and related property of Founders located in the Central Basin Platform of the Texas Permian Basin in Ector County, Texas, for a purchase price (the “Purchase Price”) of (i) a cash deposit of $ 7.5 million paid on July 11, 2023 into a third-party escrow account as a deposit pursuant to the Founders Purchase Agreement, (ii) approximately $ 42.5 million in cash paid on the closing date, net of approximately $ 10 million of preliminary and customary purchase price adjustments with an effective date of April 1, 2023, and (iii) a deferred cash payment of $ 11.9 million paid on December 18, 2023, net of customary purchase price adjustments.

The Founders Acquisition was accounted for as an asset acquisition in accordance with ASC 805.

The fair value of the consideration paid by Ring and allocation of that amount to the underlying assets acquired, on a relative fair value basis, was recorded on Ring’s books as of the date of the closing of the Founders Acquisition.

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New Mexico Divestiture

On September 27, 2023, the Company completed the divestiture of its operated New Mexico assets to an unaffiliated party for $ 4.5 million, resulting in preliminary cash consideration of approximately $ 3.7 million, subject to customary final purchase price adjustments.

On September 27, 2023, the Company completed the divestiture of its operated New Mexico assets to an unaffiliated party for $ 4.5 million, resulting in cash consideration of approximately $ 3.6 million.

The sale had an effective date of June 1, 2023.

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Gaines County Texas Sale

On December 29, 2023, the Company completed the sale of specified oil and gas properties within Gaines County, Texas to an unaffiliated party for $ 1.5 million, which resulted in cash proceeds of $ 1.4 million, net of $ 0.1 million in commission fees.

On December 29, 2023, the Company completed the sale of certain oil and gas properties in Gaines County, Texas to an unaffiliated party for $ 1.5 million, which resulted in cash proceeds of $ 1.4 million, net of $ 0.1 million in sales fees.

The sale had an effective date of December 1, 2023.

As part of the sale, the buyer assumed an asset retirement obligation balance of approximately $ 0.5 million.

CBP Vertical Well Sale

On September 30, 2024, the Company completed the sale of certain oil and gas properties, including vertical wells and associated facilities, within Andrews County, Texas and Gaines County, Texas to an unaffiliated party for a sales price of $ 5.5 million.

As part of the sale, the buyer assumed an asset retirement obligation balance of approximately $ 2.7 million.

Yoakum County Purchase

On December 24, 2024, the Company completed the purchase of assorted leases and additional well interests in Yoakum County, Texas from an unaffiliated party for approximately $ 1.4 million.

The purchase had an effective date of December 1, 2024 with a required down payment of $ 175,000 due at closing and the remainder of $ 1,175,000 due in January 2025.

NOTE 6 — OIL AND NATURAL GAS PRODUCING ACTIVITIES

22 unchanged sentences

The Company is exposed to fluctuations in crude oil and natural gas prices on its production.

It utilizes derivative strategies that consist of either a single derivative instrument or a combination of instruments to manage the variability in cash flows associated with the forecasted sale of our future domestic oil and natural gas production.

It utilizes derivative strategies that consist of either a single derivative instrument or a combination of instruments to manage the variability in cash flows

associated with the forecasted sale of our future domestic oil and natural gas production.

While the use of derivative instruments may limit or partially reduce the downside risk of adverse commodity price movements, their use also may limit future income from favorable commodity price movements.

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Derivative assets, noncurrent $ 5,473,375 $ 11,634,714

Discounted deferred premiums — ( 1,476,848 )

Derivative assets, noncurrent, net of premiums $ 11,634,714 $ 6,129,410

Derivative liabilities, current $ 6,410,547 $ 7,520,336

4 unchanged sentences

Oil derivatives:

Realized loss on oil derivatives

$ ( 11,364,484 ) $ ( 61,875,870 ) $ ( 53,511,332 )

Realized gain (loss) on oil derivatives $ ( 10,264,202 ) $ ( 11,364,484 ) $ ( 61,875,870 )

Unrealized gain (loss) on oil derivatives 6,859,929 9,462,374 40,546,123

Loss on oil derivatives

$ ( 1,902,110 ) $ ( 21,329,747 ) $ ( 77,654,452 )

Gain (loss) on oil derivatives $ ( 3,404,273 ) $ ( 1,902,110 ) $ ( 21,329,747 )

Natural gas derivatives:

3 unchanged sentences

Gain (loss) on derivative contracts $ ( 2,365,917 ) $ 2,767,162 $ ( 21,532,659 )

The components of “Cash (paid) received for derivative settlements, net” within the Statements of Cash Flows are as follows for the respective periods:

The components of “Cash received (paid) for derivative settlements, net” within the Statements of Cash Flows are as follows for the respective periods:

For the years ended December 31,

1 unchanged sentence

Cash flows from operating activities

Cash paid for oil derivatives

$ ( 11,364,484 ) $ ( 61,875,870 ) $ ( 53,511,332 )

Cash (paid) received on natural gas derivatives 2,279,564 ( 650,084 ) 743,178

Cash paid for derivative settlements, net $ ( 9,084,920 ) $ ( 62,525,954 ) $ ( 52,768,154 )

Cash received (paid) for oil derivatives $ ( 10,264,202 ) $ ( 11,364,484 ) $ ( 61,875,870 )

Cash received (paid) for natural gas derivatives 5,070,529 2,279,564 ( 650,084 )

Cash received (paid) for derivative settlements, net $ ( 5,193,673 ) $ ( 9,084,920 ) $ ( 62,525,954 )

The following tables reflect the details of current derivative contracts as of December 31, 2024 (Quantities are in barrels (Bbl) for the oil derivative contracts and in million British thermal units (MMBtu) for the natural gas derivative contracts):

Oil Hedges (WTI)

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026

Hedged volume (Bbl) 193,397 151,763 351,917 141,755 477,350 457,101 59,400 423,000

Weighted average swap price $ 68.68 $ 68.53 $ 71.41 $ 69.13 $ 70.16 $ 69.38 $ 66.70 $ 66.70

Deferred premium puts:

Hedged volume (Bbl) 45,500 45,500 — — — — — —

Weighted average strike price $ 84.70 $ 82.80 $ — $ — $ — $ — $ — $ —

Weighted average deferred premium price $ 17.15 $ 17.49 $ — $ — $ — $ — $ — $ —

Two-way collars:

3 unchanged sentences

Gas Hedges (Henry Hub)

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026

Hedged volume (MMBtu) 451,884 647,200 330,250 11,400 26,600 555,300 17,400 513,300

5 unchanged sentences

Oil Hedges (basis differential)

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026

Argus basis swaps:

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NOTE 9 — REVOLVING LINE OF CREDIT

On July 1, 2014, the Company entered into a Credit Agreement with SunTrust Bank (now Truist), as lender, issuing bank and administrative agent for several banks and other financial institutions and lenders (the “Administrative Agent”), (which was amended several times) that provided for a maximum borrowing base of $ 1 billion with security consisting of substantially all of the assets of the Company.

In April 2019, the Company amended and restated the Credit Agreement with the Administrative Agent (as amended and restated, the “Credit Facility”).

On August 31, 2022, the Company modified its Credit Facility through a Second Amended and Restated Credit Agreement (the "Second Credit Agreement"), extending the maturity date of the facility to August 2026 and the syndicate was modified to add five lenders, replacing five lenders.

In conjunction with the Stronghold Acquisition, with the newly acquired assets put up for collateral, the Company established a borrowing base of $ 600 million.

The borrowing base is subject to periodic redeterminations, mandatory reductions and further adjustments from time to time.

On July 1, 2014, the Company entered into a Credit Agreement with SunTrust Bank (now Truist Bank), as lender, issuing bank and administrative agent for several banks and other financial institutions and lenders (the “Administrative Agent”), (which was amended several times) that provided for a maximum borrowing base of $ 1 billion with security consisting of substantially all of the assets of the Company.

In April 2019, the Company amended and restated the Credit Agreement with the Administrative Agent (as amended and restated, the “Amended Credit Facility”).

On August 31, 2022, the Company modified its Amended Credit Facility through that certain Second Amended and Restated Credit Agreement (the "Second Credit Agreement"), extending the maturity date of the facility to August 2026 and the syndicate was modified to add five lenders, replacing five lenders.

On February 12, 2024, the Company, Truist Bank as the Administrative Agent and Issuing Bank, and the lenders party thereto (the "Lenders") entered into an amendment (the "Amendment") to the Second Credit Agreement.

Among other things, the Amendment amends the definition of Free Cash Flow so amounts used by the Company for acquisitions will no longer be subtracted from the calculation of Free Cash Flow.

The Second Credit Agreement has a borrowing base of $ 600 million, which is subject to periodic redeterminations, mandatory reductions and further adjustments from time to time.

The borrowing base is redetermined semi-annually each May and November.

The borrowing base is subject to reduction in certain circumstances such as the sale or disposition of certain oil and gas properties of the Company or its subsidiaries and cancellation of certain hedging positions.

Rather than Eurodollar loans, the reference rate on the Second Credit Agreement is the SOFR.

Also, the Second Credit Agreement permits the Company to declare dividends for its equity owners, subject to certain limitations, including (i) no default or event of default has occurred or will occur upon such payments, (ii) the pro forma Leverage Ratio (outstanding debt to adjusted earnings before interest, taxes, depreciation and amortization, exploration expenses, and all other non-cash charges acceptable to the Administrative Agent) does not exceed 2.00 to 1.00, (iii) the amount of such payments does not exceed Available Free Cash Flow (as defined in the Second Credit Agreement), and (iv) the Borrowing Base Utilization Percentage (as defined in the Second Credit Agreement) is not greater than 80 %.

The borrowing base is subject to reduction in certain circumstances such as the sale or disposition of certain oil and gas properties of the Company and cancellation of certain hedging positions.

Rather than Eurodollar loans, the reference rate in the Second Credit Agreement is the SOFR.

Also, the Second Credit Agreement permits the Company to declare dividends for its equity owners, subject to certain limitations, including (i) no

default or event of default has occurred or will occur upon such payments, (ii) the pro forma Leverage Ratio (outstanding debt to adjusted earnings before interest, taxes, depreciation and amortization, exploration expenses, and all other non-cash charges acceptable to the Administrative Agent) does not exceed 2.00 to 1.00, (iii) the amount of such payments does not exceed Available Free Cash Flow (as defined in the Second Credit Agreement), and (iv) the Borrowing Base Utilization Percentage (as defined in the Second Credit Agreement) is not greater than 80 %.

The interest rate on each SOFR Loan will be the adjusted term SOFR for the applicable interest period plus a margin between 3.0 % and 4.0 % (depending on the then-current level of borrowing base usage).

The annual interest rate on each

base rate Loan is (a) the greatest of (i) the Administrative Agent’s prime lending rate, (ii) the Federal Funds Rate (as defined in the Second Credit Agreement) plus 0.5 % per annum, (iii) the adjusted term SOFR determined on a daily basis for an interest period of one month, plus 1.00 % per annum and (iv) 0.00 % per annum, plus (b) a margin between 2.0 % and 3.0 % per annum (depending on the then-current level of borrowing base usage).

The annual interest rate on each base rate loan is (a) the greatest of (i) the Administrative Agent’s prime lending rate, (ii) the Federal Funds Rate (as defined in the Second Credit Agreement) plus 0.5 % per annum, (iii) the adjusted term SOFR determined on a daily basis for an interest period of one month, plus 1.00 % per annum and (iv) 0.00 % per annum, plus (b) a margin between 2.0 % and 3.0 % per annum (depending on the then-current level of borrowing base usage).

The Second Credit Agreement contains certain covenants, which, among other things, require the maintenance of (i) a total Leverage Ratio of not more than 3.0 to 1.0 and (ii) a minimum ratio of Current Assets to Current Liabilities (as such terms are defined in the Second Credit Agreement) of 1.0 to 1.0.

The Second Credit Agreement also contains other customary affirmative and negative covenants and events of default.

The Company is required to maintain on a rolling 24 months basis, hedging transactions in respect of crude oil and natural gas, on not less than 50 % of the projected production from its proved, developed, producing oil and gas.

However, if the borrowing base utilization is less than 25 % at the hedge testing date and the Leverage Ratio is not greater than 1.25 to 1.00, the required hedging percentage for months 13 through 24 of the rolling 24 month period provided for will be 0 % from such hedge testing date to the next succeeding hedge testing date and if the borrowing base utilization percentage is equal to or greater than 25 %, but less than 50 % and the Leverage Ratio is not greater than 1.25 to 1.00, the required hedging percentage for months 13 through 24 of the rolling 24 month period provided for will be 25 % from such hedge testing date to the next succeeding hedge testing date.

As of December 31, 2023, $ 425 million was outstanding on the Credit Facility and the Company was in compliance with all covenants contained in the Second Credit Agreement.

As of December 31, 2024, $ 385 million was outstanding on the Credit Facility and the Company was in compliance with all covenants in the Second Credit Agreement.

Under the Second Credit Agreement, the applicable percentage for the unused commitment fee is 0.5 % per annum for all levels of borrowing base utilization.

As of December 31, 2023, the Company's unused line of credit was $ 174.2 million, which was calculated by subtracting the outstanding Credit Facility balance of $ 425 million and standby letters of credit of $ 760,438 in total ($ 260,000 with state and federal agencies and $ 500,438 with an insurance company for New Mexico surety bonds) from the $ 600 million borrowing base.

Note 14 — COMMITMENTS AND CONTINGENCIES describes changes in the surety bonds which did not yet affect the letters of credit (collateral) aforementioned.

As of December 31, 2024, the Company's unused line of credit was $ 215.0 million, which was calculated by subtracting the outstanding Credit Facility balance of $ 385 million and standby letters of credit of $ 35,000 in total ($ 10,000 with state and federal agencies and $ 25,000 with an insurance company for New Mexico state surety bonds) from the $ 600 million borrowing base.

NOTE 10 — ASSET RETIREMENT OBLIGATION

The Company records the obligation to plug and abandon oil and gas wells at the dates properties are either acquired or the wells are drilled.

The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion expense, and any revisions made to the costs or timing estimates.

The asset retirement obligation is incurred using an annual credit-adjusted risk-free discount rate at the applicable dates.

A reconciliation of the asset retirement obligation for the years ended December 31, 2024, 2023 and 2022 is as follows:

2 unchanged sentences

Liabilities incurred 353,008

Liabilities sold

( 2,934,126 )

Liabilities settled ( 940,738 )

Revision of estimate (1)

Accretion expense 983,432

7 unchanged sentences

Balance, December 31, 2023 $ 28,248,084

Liabilities acquired 2,090,777

Liabilities incurred 695,553

6 unchanged sentences

(1) Several factors are considered in the annual review process, including current estimates for removal cost and estimated remaining useful life of the assets.

The 2021 revision of estimates primarily reflect updated interests for our working interest partners.

The revisions recorded during the years ended December 31, 2024 and 2023 were related to shorter estimated useful lives, with regards to planned dates to plug and abandon such assets.

The following table presents the Company's current and non-current asset retirement obligation balances as of the periods specified.

7 unchanged sentences

Issuance of equity instruments in public and private offerings – In October 2020, the Company closed on an underwritten public offering of (i) 9,575,800 shares of common stock, (ii) 13,428,500 Pre-Funded Warrants and (iii) 23,004,300 warrants to purchase common stock (the “Common Warrants”) at a combined purchase price of $ 0.70 .

This includes a

partial exercise of the over-allotment.

This includes a partial exercise of the over-allotment.

The Common Warrants have a term of five years ending in October 2025 and an exercise price of $ 0.80 per share.

Gross proceeds totaled $ 16,089,582 .

Concurrently with the underwritten public offering, the Company closed on a registered direct offering of (i) 3,500,000 shares of common stock, (ii) 3,300,000 Pre-Funded Warrants and (iii) 6,800,000 Common Warrants at a combined purchase price of $ 0.70 per share of common stock and Pre-Funded Warrants.

purchase price of $ 0.70 per share of common stock and Pre-Funded Warrants.

The Common Warrants have a term of five years ending in October 2025 and an exercise price of $ 0.80 per share.

11 unchanged sentences

The Company received aggregate gross proceeds of $ 8,997,543 from the exercise of the common warrants by the Participating Holders pursuant to the Exercise Agreement, which was recognized as an equity issuance cost in accordance with ASC 815-40-35-17(a).

In the Statements of Stockholders' Equity, the net impact to Stockholders' Equity is $ 8,687,655 , which is net of $ 309,888 in advisory fees.

In the Statement of Stockholders' Equity, the net impact to Stockholders' Equity is $ 8,687,655 , which is net of $ 309,888 in advisory fees.

As of December 31, 2023, a total of 78,200 Common Warrants remained outstanding.

No Common Warrants were exercised during 2024, so a total of 78,200 Common Warrants remained outstanding as of December 31, 2024.

Common stock issued for Stronghold acquisition - As part of the Stronghold Acquisition, 21,339,986 shares of common stock were issued to the sellers.

4 unchanged sentences

Refer to "NOTE 5 — ACQUISITIONS & DIVESTITURES" for the purchase price consideration allocated to the aforementioned stock issuances.

Common stock issued for option exercises – During the years ended December 31, 2022 and 2021, the Company issued 52,494 and 100,000 shares of common stock as a result of stock option exercises, respectively.

No stock options were exercised in 2023.

Common stock issued for option exercises – During the year ended December 31, 2022, the Company issued 52,494 shares of common stock as a result of stock option exercises.

No stock options were exercised in 2023 or 2024.

The following tables present the details of the exercises:

10 unchanged sentences

2022 Weighted Averages $ 2.00 $ 4.21

exercised Exercise

price ($) Shares

issued Shares

retained Cash paid at

exercise ($) Stock price

on date of exercise

($) Aggregate value

of shares retained

2022 100,000 $ 2.00 52,494 47,506 $ — $ 4.21 $ 200,000

2022 Totals 100,000 52,494 47,506 $ — 200,000

2022 Weighted Averages $ 2.00 $ 4.21

NOTE 12 — EMPLOYEE STOCK OPTIONS, RESTRICTED STOCK AWARD PLAN, AND 401(K)

Compensation expense charged against income for share-based awards during the years ended December 31, 2023, 2022, and 2021 was $ 8,833,425 , $ 7,162,231 , and $ 2,418,323 , respectively.

Compensation expense charged against income for share-based awards during the years ended December 31, 2024, 2023, and 2022 is shown in the table below.

These amounts are included in General and administrative expense in the Statements of Operations.

In 2011, the Board approved and adopted a long-term incentive plan (the “2011 Plan”), which was subsequently approved and amended by the shareholders.

There were 536,755 shares eligible for grant, either as stock options or as restricted stock, as of December 31, 2023.

In 2021, the Board approved and adopted the Ring Energy, Inc.

2021 Omnibus Incentive Plan (the “2021 Plan”), which was subsequently approved by the shareholders at the 2021 Annual Meeting.

For the years ended December 31,

2024 2023 2022

Share-based compensation expense from:

Employee stock options

Restricted stock unit grants

3,544,748 4,537,026 4,148,639

Performance stock unit awards

1,961,269 4,296,399 3,013,592

Total share-based compensation

$ 5,506,017 $ 8,833,425 $ 7,162,231

In 2011, the Board of Directors (the "Board") of the Company approved and adopted a long-term incentive plan (the “2011 Plan”), which was subsequently approved and amended by the shareholders.

As of December 31, 2024, there were no shares available for future grants under the 2011 Plan.

In 2021, the Board and Company shareholders approved and adopted the Ring Energy, Inc.

2021 Omnibus Incentive Plan (the “2021 Plan”).

The 2021 Plan provides that the Company may grant options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards, other share-based awards, other cash-based awards, or any combination of the foregoing.

At the 2023 Annual Meeting, the shareholders approved an amendment to the 2021 Plan to increase the number of shares available under the 2021 Plan by 6.0 million.

Accordingly, there were 8,224,394 shares available for grant as of December 31, 2023 under the 2021 Plan.

As of December 31, 2024, there were 5,317,129 shares available for grant under the 2021 Plan.

Employee Stock Options – No stock options were granted in the years ended December 31, 2024, 2023, or 2022.

All outstanding stock option awards vest at the rate of 20 % each year over five years beginning one year from the date granted

and expire ten years from the grant date.

All outstanding stock option awards vest at the rate of 20 % each year over five years beginning one year from the date granted and expire ten years from the grant date.

A summary of the status of the stock options as of December 31, 2024, 2023, and 2022 and changes during the years ended December 31, 2024, 2023, and 2022 is as follows:

9 unchanged sentences

Exercisable at end of year 65,500 $ 10.70 70,500 $ 10.33 265,500 $ 4.21

For the years ended December 31, 2023, 2022, and 2021, the Company incurred share-based compensation expense related to stock options of $ 0 , $ 0 , and $ 20,934 , respectively.

As of December 31, 2024, the Company had $ 0 of unrecognized compensation cost related to stock options.

2 unchanged sentences

The year-end intrinsic values are based on a December 31, 2024 closing stock price of $ 1.36 .

No stock options were exercised during 2023.

Stock options exercised of 100,000 shares in 2022 had an aggregate intrinsic value on the date of exercise of $ 221,000 .

No stock options were exercised during 2024 or 2023.

Stock options exercised of 100,000 shares in 2022 had an aggregate intrinsic value on the date of exercise of $ 221,000 .

10 unchanged sentences

$ 10.70 65,500 1.55 65,500

$ 10.33 70,500 2.39 70,500

Restricted stock unit grants – Following is a table reflecting the restricted stock unit grants during 2024, 2023 and 2022:

1 unchanged sentence

restricted stock units

April 30, 2021 33,950

June 17, 2021 1,162,152

July 6, 2021 11,824

July 12, 2021 4,007

September 1, 2021 10,417

September 8, 2021 3,306

February 9, 2022 1,247,061

7 unchanged sentences

February 16, 2023 2,270,842

February 13, 2024 2,647,970

April 5, 2024 60,000

July 31, 2024 76,600

December 9, 2024 83,000

Restricted stock unit grants issued prior to 2020 vest at the rate of 20 % each year over five years beginning one year from the date granted.

Restricted stock unit grants issued during 2020 and in following years vest at a rate of 33 % each year over three years beginning one year from the date granted for all employees.

for members of the Board, the 2021 restricted stock unit grants vest on the earliest of (i) the day before the next shareholder meeting or (ii) the first anniversary of the date of the award for 2022 restricted stock units.

Forfeitures are recognized as a reduction to share-based compensation expense in the period of occurrence.

Restricted stock unit awards granted to members of the Board generally vest on the first anniversary of the grant date.

The Company accrues for estimated forfeitures in share-based compensation by an annual factor of 3 %.

For forfeited awards, in the period of occurrence, the reduction in expense is booked as an incremental reduction to share-based compensation.

For non-forfeited awards, in the final period of expense, the incremental remaining expense is recognized.

A summary of the status of restricted stock unit grants and changes during the years ended December 31, 2024, 2023 and 2022 is as follows:

12 unchanged sentences

Outstanding at end of year 3,817,128 $ 1.70 3,148,226 $ 2.40 2,623,790 $ 2.29

For the years ended December 31, 2023, 2022 and 2021, the Company incurred share-based compensation expense related to restricted stock unit grants of $ 4,537,026 , $ 4,148,639 , and $ 2,225,895 , respectively.

As of December 31, 2024, the Company had $ 2,247,371 of unrecognized compensation cost related to restricted stock unit grants that will be recognized over a weighted average period of 1.76 years.

1 unchanged sentence

At the dates of vesting those restricted stock units had an aggregate intrinsic value of $ 2,439,773 , $ 3,203,568 , and $ 3,807,996 , respectively.

Performance Stock Units - In accordance with the 2021 Plan, as of November 22, 2021, the Company entered into performance stock unit (“PSU”) agreements (the “PSU Agreement”) with certain employees.

Performance Stock Units - In accordance with the 2021 Plan, upon Board approval, the Company entered into performance stock unit (“PSU”) agreements (the “PSU Agreement”) with certain employees.

The PSUs are performance-based restricted stock units subject to the terms of the 2021 Plan and the PSU Agreement.

Upon Board approval, a total of

860,216 PSUs were granted to the Company’s five executive officers (the “2021 PSU Awards”).

On November 22, 2021, the Company granted a total of 860,216 PSUs to the Company’s five executive officers (the “2021 PSU Awards”).

The performance period for the 2021 PSU Awards began on January 1, 2021, and ended on December 31, 2023.

1 unchanged sentence

On February 9, 2022, the Company granted a total of 860,216 PSUs to the Company's five executive officers (the "2022 PSU Awards").

The performance period for the 2022 PSU Awards began on January 1, 2022, and will end on December 31, 2024.

The PSUs are performance-based restricted stock units subject to the terms of the 2021 Plan and the PSU Agreement.

The performance period for the 2022 PSU Awards began on January 1, 2022, and ended on December 31, 2024.

In July 2024, two of the executive officers separated from the Company, forfeiting 215,054 of these PSUs.

Based on the achievement of the performance goals for the 2022 PSU Awards, a total of 571,324 PSUs vested on December 31, 2024.

On February 16, 2023, the Company granted a total of 1,162,162 PSUs to the Company's five executive officers (the "2023 PSU Awards").

The performance period for the 2023 PSU Awards began on January 1, 2023, and will end on December 31, 2025.

In July 2024, two of the aforementioned executive officers separated from the Company, forfeiting 270,270 of these PSUs.

On April 30, 2024, the Company granted a total of 1,378,378 PSUs to the Company's five executive officers (the "2024 PSU Awards").

The performance period for the 2024 PSU Awards began on January 1, 2024, and will end on December 31, 2026.

In July 2024, two of the aforementioned executive officers separated from the Company, forfeiting 378,378 of these PSUs.

A summary of the status of the PSU awards and changes during the years ended December 31, 2024, 2023 and 2022 are as follows:

9 unchanged sentences

248,742 — 309,808 — — —

Forfeited or rescinded — — — — — —

Forfeited, cancelled or rescinded ( 1,186,282 ) 2.38 — — — —

Vested ( 571,324 ) 2.79 ( 1,170,024 ) 3.66 — —

Outstanding at end of year 1,891,892 $ 2.47 2,022,378 $ 3.11 1,720,432 $ 3.76

No forfeitures for the PSU awards have been recognized as of December 31, 2023, but the Company would recognize any such forfeitures in the period of occurrence as a reduction to share-based compensation expense.

For the years ended December 31, 2023, 2022 and 2021, the Company incurred share-based compensation expense related to the PSU Awards of $ 4,296,399 , $ 3,013,592 , and $ 171,494 , respectively.

The Company accrues for estimated forfeitures in share-based compensation by an annual factor of 3 %.

For forfeited awards, in the period of occurrence, the reduction in expense is booked as an incremental reduction to share-based compensation.

For non-forfeited awards, in the final period of expense, the incremental remaining expense is recognized.

As of December 31, 2024, the Company had $ 3,088,198 of unrecognized compensation cost related to the PSU Awards that will be recognized over a weighted average period of 1.60 years.

8 unchanged sentences

Employer safe harbor match $ 455,641 $ 346,268 $ 284,094

NOTE 13 — RELATED PARTY TRANSACTIONS

The Company leased office space in Tulsa, Oklahoma, from Arenaco, LLC (“Arenaco”), a company that was owned by

two stockholders of the Company, Mr.

Rochford, former Chairman of the Board, and Mr.

McCabe, a former director of the

During the year ended December 31, 2021, the Company paid $ 10,000 to Arenaco.

The month-to-month

Arenaco lease was terminated as of March 31, 2021.

During June 2021, the Company began using Pro-Ject Chemicals, LLC (“PJ Chemicals”) to perform various chemical services on its wells.

As publicly disclosed on the Company’s website, Paul D.

McKinney, Chief Executive Officer and Chairman of the Board, was a member of the board of directors of Pro-Ject Holdings, LLC, a privately owned oil field chemical services company and parent of PJ Chemicals.

McKinney owned 0.34 % of the shares of Pro-Ject Holdings, LLC.

During the year ended December 31, 2021, the Company paid $ 117,830 to PJ Chemicals.

As of December 31, 2021 the Company had accounts payable of $ 37,641 due to PJ Chemicals.

As of 2022, Mr.

McKinney was no longer on the board of directors of Pro-Ject Holdings, LLC.

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Standby Letters of Credit – A commercial bank issued standby letters of credit on behalf of the Company totaling $ 260,000 to state and federal agencies and $ 500,438 to an insurance company to secure the surety bonds described below.

The standby letters of credit are valid until cancelled or matured and are collateralized by the revolving credit facility with the bank.

The terms of the letters of credit to the state and federal agencies are extended for a term of one year at a time.

The Company intends to renew the standby letters of credit to the state and federal agencies for as long as the Company does business in the State of Texas.

The letters of credit to the insurance company will be renewed if the insurance requires them to retain the surety bonds;

however, as the Company no longer operates any wells in the State of New Mexico, these standby letters of credit will not be renewed.

Standby Letters of Credit – A commercial bank previously issued standby letters of credit on behalf of the Company for $ 250,000 to the State of Texas, $ 10,000 to a federal agency and $ 500,438 to an insurance company to secure the surety bonds described below.

On February 23, 2024, the bank reduced the $ 500,438 standby letter of credit to $ 25,000 after approval of the insurance company, reduced the $ 250,000 standby letter of credit to the State of Texas to $ 0 , and retained the standby letter of credit to the federal agency at $ 10,000 .

As of December 31, 2024, the Company had total standby letters of credit outstanding of $ 35,000 .

The standby letters of credit are valid until cancelled or matured and are collateralized by the Credit Facility with the bank.

The terms of the letter of credit to the federal agency is extended for a term of one year at a time.

The Company intends to renew the standby letter of credit to the federal agency for as long as required.

Although the Company no longer operates any wells in the State of New Mexico, that standby letter of credit will need to be renewed until released.

No amounts have been drawn under the standby letters of credit.

2 unchanged sentences

The terms of the surety bonds are extended for a term of one year at a time.

The Company does not intend to renew the surety bonds in the State of New Mexico, as these operated assets have now been sold to a third party.

As of December 31, 2023, the Company had remaining surety bonds in total of $ 25,000 .

As of December 31,

2024, the Company still had a surety bond in place of $ 25,000 for the State of New Mexico;

however, these bonds are expected to be eliminated once change of ownership is approved by the New Mexico Oil Conservation Division.

On January 10, 2024, two insurance companies issued surety bonds on behalf of the Company, one for $ 250,000 , a Texas Railroad Commission ("RRC") required blanket performance bond to operate 100 wells or more in the State of Texas, and one for $ 2,000,000 , an RRC required blanket plugging extension bond, each with zero collateral requirements.

The term for these two surety bonds ends on July 1, 2025 and they can be renewed at that time.

As of December 31, 2024, the Company had $ 2,275,000 in total surety bonds.

NOTE 14 — INCOME TAXES

4 unchanged sentences

State current tax

401,197 72,213 —

State deferred tax 943,747 954,551 1,971,044

14 unchanged sentences

Provision for Income Taxes $ 20,440,954 $ 125,242 $ 8,408,724

(1) Amount represents pre-tax book income, net of income taxes paid.

(1) Amount in the year ended December 31, 2023 represented pre-tax book income, net of income taxes paid.

The Company's deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting.

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Net operating loss (NOL) carryforward 68,516,720 82,011,212

Equity compensation 1,372,277 1,554,680

Share-based compensation 1,097,273 1,372,277

Asset retirement obligation 5,755,174 6,165,239

Fair market value of derivatives 224,209 2,827,202

Fair value of derivative instruments — 224,209

§163(j) business interest expense carryforward 18,838,600 12,854,900

Others 1,638,297 1,173,441

Other 1,672,268 1,638,297

Gross Deferred Tax Assets 95,880,035 104,266,134

3 unchanged sentences

Property and equipment ( 123,318,803 ) ( 111,872,367 )

Fair value of derivative instruments ( 392,761 ) —

Other ( 760,273 ) ( 945,812 )

Net Deferred Liabilities ( 112,818,179 ) ( 71,987,825 )

Net Deferred Tax Liabilities ( 124,471,837 ) ( 112,818,179 )

Net Deferred Tax Liability ( 28,591,802 ) ( 8,552,045 )

As of December 31, 2024, the Company had net operating loss carryforwards for federal income tax reporting purposes of approximately $ 89.7 million which, if unused, will begin to expire in 2033 and fully expire in 2037 and an additional $ 235.0 million that can be carried forward indefinitely.

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This resulted in an ending federal net deferred tax liability of $ 5,536,158 .

This, coupled with the income tax provision for the year ended December 31, 2024 resulted in an ending federal net deferred tax liability of $ 24,632,169 .

Additionally, the Company reported a net state deferred tax liability at December 31, 2024 of $ 3,959,633 attributable to certain state deferred tax liabilities mainly associated with property and equipment.

NOTE 15 — SEGMENT REPORTING

In accordance with ASU 2023-07 " Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ," the Company has performed an assessment of its reporting to comply with the new requirements for the fiscal year beginning January 1, 2024.

The Company's operations consist of the exploration, production, and sale of oil, natural gas, and NGLs, primarily within the Permian Basin of Texas, and is regulated by the Texas RRC.

The Company operates different areas within the Permian Basin, including the Northwest Shelf and Central Basin Platform.

The Company's operations and financials are managed by one cohesive group of individuals, identified as the chief operating decision maker ("CODM"), consisting of the Chairman of the Board and Chief Executive Officer;

Executive Vice President and Chief Financial Officer;

Executive Vice President of Engineering and Corporate Strategy;

Executive Vice President of Exploration and Geosciences;

and Vice President of Operations.

The CODM group reviews the Company's operating results, including condensed financial statements on a monthly basis for evaluating performance and determining resource allocation.

The significant expense categories provided to the CODM include lease operating expenses;

gathering, transportation and processing costs;

ad valorem taxes;

and oil and natural gas production taxes.

Each of these costs are deducted from oil, natural gas, and natural gas liquids revenues by operating segment to arrive at operating segment profit, used to assess performance.

The Company assessed whether its operating segments exhibited similar economic characteristics and whether its operating segments had a similar nature of products, services, production processes, purchaser types/classes, product distribution, and regulatory environment.

Each operating segment has similar products (oil, natural gas, and NGLs), similar production processes, similar types of purchasers (midstream companies, or companies with midstream components), similar methods of product delivery, and is governed by the same regulations.

After a thorough analysis of each of these factors with regards to the Company's operating segments, it has been determined that it is appropriate to aggregate its operating segments into a single reportable segment, Exploration and Production, which includes all of its revenues, lease operating expenses, gathering, transportation and processing costs, ad valorem taxes, and oil and natural gas production taxes.

Refer to table below.

For the years ended December 31,

2024 2023 2022

Exploration and Production

Oil, natural gas, and natural gas liquids revenues (1)

$ 366,327,414 $ 361,056,001 $ 347,249,537

Lease operating expenses (2)

( 78,310,949 ) ( 70,158,227 ) ( 47,695,351 )

Gathering, transportation and processing costs ( 506,333 ) ( 457,573 ) ( 1,830,024 )

Ad valorem taxes ( 8,069,064 ) ( 6,757,841 ) ( 4,670,617 )

Oil and natural gas production taxes ( 16,116,565 ) ( 18,135,336 ) ( 17,125,982 )

Exploration and Production segment profit $ 263,324,503 $ 265,547,024 $ 275,927,563

(1) All of the Company's revenues are within the Permian Basin within the United States.

(2) The CODM also reviews the following cost categories within lease operating expenses.

Refer to the following table.

For the years ended December 31,

2024 2023 2022

Lease operating expenses:

Workovers $ 15,150,944 $ 14,919,560 $ 7,443,031

Other lease operating expenses $ 63,160,005 $ 55,238,667 $ 40,252,320

Total lease operating expenses $ 78,310,949 $ 70,158,227 $ 47,695,351

The following tables include a reconciliation of the total reportable segments' measures of profit or loss to the Company's consolidated income before income taxes.

Additionally included is a reconciliation between the reportable segments' assets to the Company's consolidated assets.

For the year ended December 31, 2024

Exploration and Production Corporate Total Company

Oil, Natural Gas, and Natural Gas Liquids Revenues $ 366,327,414 $ — $ 366,327,414

Lease operating expenses ( 78,310,949 ) — ( 78,310,949 )

Gathering, transportation and processing costs ( 506,333 ) — ( 506,333 )

Ad valorem taxes ( 8,069,064 ) — ( 8,069,064 )

Oil and natural gas production taxes ( 16,116,565 ) — ( 16,116,565 )

Depreciation, depletion and amortization (3)

— ( 98,702,843 ) ( 98,702,843 )

Asset retirement obligation accretion — ( 1,380,298 ) ( 1,380,298 )

Operating lease expense — ( 700,362 ) ( 700,362 )

General and administrative expense — ( 29,640,300 ) ( 29,640,300 )

Interest income — 491,946 491,946

Interest (expense) — ( 43,311,810 ) ( 43,311,810 )

Gain (loss) on derivative contracts — ( 2,365,917 ) ( 2,365,917 )

Gain (loss) on disposal of assets — 89,693 89,693

Other income — 106,656 106,656

Income (Loss) Before Benefit from (Provision for) Income Taxes $ 263,324,503 $ ( 175,413,235 ) $ 87,911,268

Total Assets (3)

$ 1,381,583,504 $ 26,515,970 $ 1,408,099,474

Capital expenditures $ 151,946,171 $ — $ 151,946,171

(3) All of the Company's assets are located within the United States.

As the CODM does not view depreciation, depletion and amortization as a significant Exploration and Production segment expense, the Company has included this expense within the Corporate column of the reconciliation table.

For the year ended December 31, 2023

Exploration and Production Corporate Total Company

Oil, Natural Gas, and Natural Gas Liquids Revenues $ 361,056,001 $ — $ 361,056,001

Lease operating expenses ( 70,158,227 ) — ( 70,158,227 )

Gathering, transportation and processing costs ( 457,573 ) — ( 457,573 )

Ad valorem taxes ( 6,757,841 ) — ( 6,757,841 )

Oil and natural gas production taxes ( 18,135,336 ) — ( 18,135,336 )

Depreciation, depletion and amortization (3)

— ( 88,610,291 ) ( 88,610,291 )

Asset retirement obligation accretion — ( 1,425,686 ) ( 1,425,686 )

Operating lease expense — ( 541,801 ) ( 541,801 )

General and administrative expense — ( 29,188,755 ) ( 29,188,755 )

Interest income — 257,155 257,155

Interest (expense) — ( 43,926,732 ) ( 43,926,732 )

Gain (loss) on derivative contracts — 2,767,162 2,767,162

Gain (loss) on disposal of assets — ( 87,128 ) ( 87,128 )

Other income — 198,935 198,935

Income (Loss) Before Benefit from (Provision for) Income Taxes $ 265,547,024 $ ( 160,557,141 ) $ 104,989,883

Total Assets (3)

$ 1,338,584,701 $ 37,911,691 $ 1,376,496,392

Capital expenditures $ 151,969,735 $ — $ 151,969,735

For the year ended December 31, 2022

Exploration and Production Corporate Total Company

Oil, Natural Gas, and Natural Gas Liquids Revenues $ 347,249,537 $ — $ 347,249,537

Lease operating expenses ( 47,695,351 ) — ( 47,695,351 )

Gathering, transportation and processing costs ( 1,830,024 ) — ( 1,830,024 )

Ad valorem taxes ( 4,670,617 ) — ( 4,670,617 )

Oil and natural gas production taxes ( 17,125,982 ) — ( 17,125,982 )

Depreciation, depletion and amortization (3)

— ( 55,740,767 ) ( 55,740,767 )

Asset retirement obligation accretion — ( 983,432 ) ( 983,432 )

Operating lease expense — ( 363,908 ) ( 363,908 )

General and administrative expense — ( 27,095,323 ) ( 27,095,323 )

Interest income — 4 4

Interest (expense) — ( 23,167,729 ) ( 23,167,729 )

Gain (loss) on derivative contracts — ( 21,532,659 ) ( 21,532,659 )

Income (Loss) Before Benefit from (Provision for) Income Taxes $ 275,927,563 $ ( 128,883,814 ) $ 147,043,749

Total Assets (3)

$ 1,229,752,442 $ 39,247,355 $ 1,268,999,797

Capital expenditures $ 140,051,159 $ — $ 140,051,159

The following table discloses the purchasers from which 10% or more of revenues were derived in the years noted.

For the years ended December 31,

2024 2023 2022

Purchasers with 10% or more percentage of total revenue (4)

Phillips 66 Company ("Phillips") 61 % 66 % 68 %

Concord Energy LLC 14 %

LPC Crude III, LLC 13 %

NGL Crude Partners ("NGL Crude") 10 % 10 % 13 %

Enterprise Crude Oil LLC ("Enterprise") 12 % 5 %

(4) All the Company's purchasers are within the Exploration and Production operating segment.

NOTE 16 — LEGAL MATTERS

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Ring Energy, Inc., that was filed in July 2021.

The plaintiff, EPUS Permian Assets, LLC, claims breach of

contract, money had and received by fraudulent inducement, unjust enrichment and constructive trust.

The plaintiff, EPUS Permian Assets, LLC, claims breach of contract, money had and received by fraudulent inducement, unjust enrichment and constructive trust.

The plaintiff is requesting its forfeited deposit of $ 5,500,000 in connection with a proposed property sale by the Company plus related damages, and attorneys’ fees and costs.

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The Company has filed an answer and a counterclaim denying the allegations and asserting affirmative defenses that would bar or substantially limit the plaintiff’s claims, asserting breach of contract and requesting a declaratory judgment and attorneys’ fees and costs.

The parties have begun taking depositions and are conducting discovery.

The parties have concluded discovery in the matter and are currently set for trial in the first quarter of 2025.

NOTE 17 — SUBSEQUENT EVENTS

Surety Bonds - On January 10, 2024, two insurance companies issued surety bonds on behalf of the Company, one for $ 250,000 , an RRC required blanket performance bond to operate 100 wells or more in the State of Texas, and one for $ 2,000,000 , an RRC required blanket plugging extension bond, each with zero collateral requirements.

The term for these two surety bonds ends on July 1, 2025 and can be renewed at that time.

First Amendment to Second Amended and Restated Credit Agreement - On February 12, 2024, the Company, Truist Bank ("Truist") as the Administrative Agent and Issuing Bank, and the lenders party thereto (the "Lenders") entered into an amendment (the "Amendment") to the Second Amended and Restated Credit Agreement dated August 31, 2022, by and among the Company, as Borrower, Truist as Administrative Agent and Issuing Bank, and the Lenders (together with all amendments or other modifications, the "Credit Agreement").

Among other things, the Amendment amends the definition of Free Cash Flow so amounts used by the Company for acquisitions will no longer be subtracted from the calculation of Free Cash Flow.

Lime Rock Purchase and Sale Agreement On February 25, 2025, the Company, as buyer, and Lime Rock Resources IV-A, L.P.

("LRRA") and Lime Rock Resources IV-C, L.P.

("LRRC" and with LRRA, "Lime Rock"), as seller, entered into a purchase and sale agreement (the "Purchase Agreement").

The Purchase Agreement provides that the Company will acquire (the "Lime Rock Acquisition") interests in oil and gas leases and related property of Lime Rock located in the Central Basin Platform of Texas for a purchase price (the "Purchase Price") of approximately $ 90 million in cash with $ 80 million due at closing and $ 10 million due on the nine months anniversary of closing, and 7,388,799 shares of our common stock.

The Purchase Price is subject to customary purchase price adjustments with an effective date of October 1, 2024.

On February 26, 2025, in connection with the Purchase Agreement, the Company deposited $ 5.0 million in cash into a third party escrow account as a deposit pursuant to the Purchase Agreement, which will be credited against the Purchase Price upon the closing of the Lime Rock Acquisition.

RING ENERGY, INC.

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Prices are adjusted by local field and lease level differentials and are held constant for life of reserves in accordance with SEC guidelines.

Proved reserves are estimated reserves of crude oil (including condensate and NGLs) and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved reserves are estimated reserves of crude oil, natural gas, and NGLs that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved developed reserves are those expected to be recovered through existing wells, equipment and methods.

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• Extensions.

In 2023, extensions of 4.8 MMBoe were primarily the result of the successful operated drilling program and non-operated activity in the Northwest Shelf and Central Basin Platform.

In 2024, extensions of 16.0 MMBoe were primarily the result of the successful operated drilling program in the Northwest Shelf and Central Basin Platform.

• Purchase of minerals in place.

In 2023, the Company completed the acquisition of Founders oil and gas leases and related property within Ector County that resulted in 8.2 MMBoe in additional reserves.

In 2024, the Company did not purchase any additional reserves.

• Sales of minerals in place.

In 2023, the Company sold 5.7 MMBoe from the divestiture of the Delaware Basin assets (30%), the New Mexico operated assets (57%), and part of the Company's assets in Gaines County (13%).

In 2024, the Company sold 1.2 MMBoe from the divestiture of certain oil and gas properties, including vertical wells and associated facilities, within the Central Basin Platform in Andrews and Gaines Counties.

• Revision of previous estimates.

In 2023, the negative revisions of prior reserves of 9.0 MMBoe consisted of 5.3 MMBoe (59%) related to changes in price and 3.7 MMBoe (41%) related to changes in performance and other economic factors.

In 2024, the negative revisions of prior reserves of 3.2 MMBoe consisted of a positive 0.2 MMBoe related to changes in price (including differentials and gathering related contract change that effects differentials), offset by a negative 3.4 MMBoe related to changes in performance and other economic factors.

Standardized Measure of Discounted Future Net Cash Flows – The standardized measure of discounted future net cash flows is computed by applying the price according to the SEC guidelines for oil and natural gas to the estimated future production of proved oil and natural gas reserves, less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, less estimated future income tax expenses (based on year-end statutory tax rates) to be incurred on pretax net cash flows less tax basis of the properties and available credits, and assuming continuation of existing economic conditions.

1 unchanged sentence

Standardized Measure of Discounted Future Net Cash Flows

December 31, 2023 2022 2021

As of December 31, 2024 2023 2022

Future cash inflows $ 6,165,487,616 $ 6,622,410,752 $ 9,871,961,000

24 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures