Business Context and Reporting Period
Company: Ring Energy, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 10, 2012 (Earliest event reported)
Reporting Period: Events occurring between March 1, 2012, and April 11, 2012.
Key Financial Metrics
This filing reports specific transaction costs rather than comprehensive financial statements. The filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity.
- Transaction Cost: $100,368 paid for the purchase of oil and gas lease interests.
- Asset Acquired: Approximately 161.4 acres of land in Andrews County, Texas.
- Ownership Interest: Approximately 89.5% leasehold interest.
- Production Status: No producing wells on the acquired leases.
Material Changes
The primary material change is the expansion of the Company's leasehold portfolio through the acquisition of assets from Patriot Royalty & Land, LLC.
- Agreement Amendment: On April 10, 2012, the Company amended a March 1, 2012 agreement to allow a second closing date (up to 45 days) for potential additional acquisitions.
- Completed Acquisition: On April 11, 2012, the Company completed the purchase of the lease interest described above.
- Potential Future Cost: If Patriot Royalty secures an additional 8.5% net leasehold interest, the Company anticipates paying approximately $9,600 at the original rate of $700 per net mineral acre.
Outlook, Risks, and Management Commentary
Management Commentary: The Company is actively pursuing additional leasehold interests contingent on the success of Patriot Royalty in securing specific acreage.
Risks and Contingencies:
- Production Risk: The acquired leases currently contain no producing wells, implying future capital expenditure and operational risk to generate revenue.
- Contingent Liability: The potential additional payment of $9,600 is contingent upon the successful acquisition of further leasehold interest by the counterparty.
Key Facts for Investor Verification
- Verify the total capital outlay of $100,368 and its impact on the Company's current cash position.
- Confirm the status of the "second closing date" and whether the additional 8.5% interest was successfully secured.
- Assess the Company's development plan and capital requirements for the 161.4 acres, given the absence of producing wells.
- Review the March 8, 2012 Form 8-K referenced in the text for the original terms of the agreement with Patriot Royalty.