Business Context and Reporting Period
Company: Ring Energy, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 4, 2014
Event: Entry into a Material Definitive Agreement to acquire oil and gas properties in Andrews County, Texas (Permian Basin).
Key Financial Metrics
This filing reports a specific transaction rather than periodic financial performance. The filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity.
| Transaction Component | Financial Detail |
|---|---|
| Producing Assets Purchase Price | $7,000,000 cash (subject to adjustments) |
| Non-Producing Properties Price | 200% of Sellers' actual costs (capped at $750.00/acre average) |
| Initial Deposit | $350,000 held in escrow |
Material Changes
The filing discloses a material change in the company's asset base through the execution of a Purchase Agreement with Raw Oil & Gas, Inc., JDH Raw Energy LC, and Smith Energy Company. No prior comparable period data is provided in this document to assess year-over-year changes.
Outlook, Risks, and Contingencies
- Closing Conditions: The transaction is subject to customary closing conditions, including Ring's approval of title to the producing properties.
- Price Adjustments: The purchase price for producing assets is subject to adjustments.
- Cost Caps: The price for non-producing properties is capped at an average of $750.00 per acre unless Ring provides written approval for a higher amount.
- Representations: Sellers have provided representations regarding the absence of encumbrances on the assets.
Investor Verification Checklist
- Verify the final purchase price after any adjustments to the $7,000,000 base for producing assets.
- Confirm the actual costs incurred by Sellers for non-producing properties to calculate the final acquisition cost.
- Review the full Purchase Agreement (Exhibit 10.1) for specific representations, warranties, and covenants.
- Monitor the status of the title approval condition required for closing.
- Assess the impact of the $350,000 escrow deposit on current liquidity.