Business Context and Reporting Period
This Form 8-K Current Report was filed by Ring Energy, Inc. on June 18, 2015, with the earliest event reported on that same date. The filing primarily addresses the entry into a material definitive agreement regarding a public equity offering and the subsequent closing of that offering.
Key Financial Metrics and Transaction Details
- Offering Size: 4,500,000 shares of common stock.
- Offering Price: $11.50 per share.
- Over-Allotment Option: Underwriters granted a 30-day option to purchase up to 675,000 additional shares.
- Net Proceeds: Approximately $49 million.
- Underwriter: SunTrust Robinson Humphrey, Inc. (representative).
- Closing Date: June 23, 2015.
The filing does not provide specific revenue, profit, cash flow, margin, or debt figures for the reporting period, as this is a transactional report rather than a periodic financial statement.
Material Changes and Use of Proceeds
The primary material change is the execution of an underwriting agreement to raise capital. The Company intends to use the net proceeds of approximately $49 million, combined with borrowings from a planned amended revolving credit facility, to fund a pending acquisition of oil and gas properties in the Ford West Field and Ford Geraldine Unit in Reeves and Culberson Counties, Texas.
If the pending acquisition is not consummated, the proceeds will be used for exploration and development activities, leasehold and property acquisitions, repayment of indebtedness, and general corporate purposes.
Outlook, Risks, and Contingencies
- Acquisition Contingency: The primary use of funds is contingent upon the successful consummation of the pending acquisition of Texas oil and gas properties.
- Related Party Transactions: Affiliates of the underwriter, SunTrust Robinson Humphrey, Inc., are lenders under the Company's revolving credit facility. These affiliates may receive more than 5% of the net proceeds of this offering in connection with the repayment of amounts under such credit agreement.
- Indemnification: The Company agreed to indemnify the underwriters against certain liabilities under the Securities Act.
Investor Verification Checklist
- Verify the final closing of the offering and the total number of shares sold, including any exercise of the 675,000 share over-allotment option.
- Confirm the status of the pending acquisition of the Ford West Field and Ford Geraldine Unit properties.
- Review the terms of the planned amended revolving credit facility to understand the leverage associated with the acquisition.
- Examine the final prospectus supplement (filed June 22, 2015) for detailed risk factors and use of proceeds.