Ring Energy, Inc. (REI) saw its loss widen to $5.94 million, or $0.14 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $1.14 million, or $0.04 a share.
Revenue during the quarter dropped 9.35 percent to $7.82 million from $8.63 million in the previous year period. Gross margin for the quarter expanded 403 basis points over the previous year period to 70.22 percent.
Operating loss for the quarter was $9.12 million, compared with an operating loss of $1.47 million in the previous year period.
Ring's chief executive officer, Mr. Kelly Hoffman, stated, "In the third quarter we continued to work hard at cutting costs and maximizing efficiencies. On a BOE basis we reduced our operating costs over 7% while increasing our overall production by 9.5% compared to our second quarter this year. We drilled and completed three new vertical development wells - one on our Central Basin Property ("CBP") and two on our Delaware Basin ("Delaware") asset. We also completed one new vertical well on our Delaware that was drilled in the second quarter. That well was drilled through the Cherry Canyon formation to the Brushy Canyon for the purpose of obtaining new logs and core samples which are critical as we start to put together our 2017 capital expenditure budget."
Operating cash flow improves significantly
Ring Energy, Inc. has generated cash of $4.90 million from operating activities during the nine month period, up 89.70 percent or $2.32 million, when compared with the last year period.
The company has spent $22.36 million cash to meet investing activities during the nine month period as against cash outgo of $99.16 million in the last year period.
Cash flow from financing activities was $15.28 million for the nine month period, down 83.22 percent or $75.79 million, when compared with the last year period.
Cash and cash equivalents stood at $2.25 million as on Sep. 30, 2016, down 27.88 percent or $0.87 million from $3.12 million on Sep. 30, 2015.
Working capital turns negative
Working capital of Ring Energy, Inc. has turned negative to $1.28 million on Sep. 30, 2016 from positive $1.30 million on Sep. 30, 2015. Current ratio was at 0.83 as on Sep. 30, 2016, down from 1.17 on Sep. 30, 2015.
Days sales outstanding went down to 60 days for the quarter compared with 64 days for the same period last year.
At the same time, days payable outstanding went up to 285 days for the quarter from 229 for the same period last year.
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