Filed pursuant to Rule 424(b)(5)

Registration No. 333-200324

 

 

PROSPECTUS SUPPLEMENT

(To Prospectus dated December 3, 2014)

 

4,500,000 Shares

 

 

Common Stock

 

 

 

We are offering 4,500,000 shares of common stock. Our common stock is traded on the NYSE MKT LLC (the “NYSE MKT”) under the symbol “REI.” This offering is not conditioned on, among other things, the completion of our previously announced acquisition of certain oil and gas assets. If the pending acquisition is not completed, we will not have any obligation to repurchase the shares of common stock sold in this offering.

 

On June 17, 2015, the last reported sale price of our common stock as reported on the NYSE MKT was $13.00 per share.

 

 

 

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page S-12 of this prospectus supplement and page 1 of the accompanying prospectus.

 

   Per Share   Total 
Public offering price  $11.50   $51,750,000 
Underwriting discounts and commissions (1)  $0.575   $2,785,500 
Proceeds, before expenses, to us  $10.925   $49,162,500 

 

 

(1) See “Underwriting (Conflicts of Interest)” for a discussion of the compensation payable to the underwriters.

 

The underwriters may also purchase up to an additional 675,000 shares of common stock from us at the public offering price above, less underwriting discounts and commissions, within 30 days of the date of this prospectus supplement to cover any over-allotments.

 

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The underwriters expect to deliver the shares of common stock to purchasers on or before June 23, 2015.

 

 

 

Sole Book-Running Manager

 

SunTrust Robinson Humphrey

 

Senior Co-Managers

 

Seaport Global Securities        Euro Pacific Capital

 

Co-Managers

 

IBERIA Capital Partners L.L.C.      
  Northland Capital Markets    
    Roth Capital Partners  
      Ladenburg Thalmann

  

The date of this prospectus supplement is June 18, 2015

 

 
 

 

TABLE OF CONTENTS

 

PROSPECTUS SUPPLEMENT

 

ABOUT THIS PROSPECTUS SUPPLEMENT S-2
   
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS S-3
   
PROSPECTUS SUPPLEMENT SUMMARY S-4
   
THE OFFERING S-8
   
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA S-9
   
RISK FACTORS S-12
   
USE OF PROCEEDS S-16
   
CAPITALIZATION S-17
   
PRICE RANGE OF OUR COMMON STOCK S-18
   
UNDERWRITING (CONFLICTS OF INTEREST) S-19
   
LEGAL MATTERS S-21
   
EXPERTS S-21
   
WHERE YOU CAN FIND MORE INFORMATION S-22
   
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE S-22

 

PROSPECTUS

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS i
   
ABOUT RING ENERGY, INC. 1
   
RISK FACTORS 1
   
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 1
   
WHERE YOU CAN FIND MORE INFORMATION 2
   
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 2
   
USE OF PROCEEDS 3
   
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS 3
   
PLAN OF DISTRIBUTION 3
   
DESCRIPTION OF CAPITAL STOCK 4
   
DESCRIPTION OF DEBT SECURITIES 8
   
DESCRIPTION OF WARRANTS 13
   
DESCRIPTION OF UNITS 14
   
LEGAL MATTERS 14
   
EXPERTS 14

 

S-1
 

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of our common stock. The second part, the accompanying prospectus, including the documents incorporated by reference, provides more general information, some of which may not apply to this offering. Generally, when we refer to this prospectus supplement, we are referring to both parts of this document combined. We urge you to carefully read this prospectus supplement, the accompanying prospectus, the information incorporated by reference herein and therein, and any free writing prospectus that we authorize to be distributed to you before buying any of the securities being offered under this prospectus supplement. This prospectus supplement may supplement, update, or change information contained in the accompanying prospectus. To the extent that any statement that we make in this prospectus supplement is inconsistent with statements made in the accompanying prospectus or any documents incorporated by reference herein or therein, the statements made in this prospectus supplement will be deemed to modify or supersede those made in the accompanying prospectus and such documents incorporated by reference herein and therein.

 

You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus and in any written communication from us or the underwriters, including any free writing prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information provided by this prospectus supplement, the accompanying prospectus, or the documents incorporated by reference in this prospectus supplement and in the accompanying prospectus is accurate as of any date other than their respective dates. Our business, financial condition, results of operations, and prospects may have changed since those dates.

 

Before you invest in our common stock, you should carefully read the registration statement (including the exhibits thereto) of which this prospectus supplement and the accompanying prospectus form a part, as well as this prospectus supplement, the accompanying prospectus, and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus. The incorporated documents are described in this prospectus supplement under “Where You Can Find More Information.”

 

S-2
 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus supplement, the accompanying prospectus, and the documents incorporated by reference in this prospectus supplement include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as anticipate,” “could,” “project,” “intend,” “estimate,” “expect,” “believe,” “predict,” “budget,” “project,” “goal,” “plan,” “forecast,” “target,” and similar expressions intended to identify forward-looking statements.

 

All statements, other than statements of historical facts, included in this prospectus supplement, the accompanying prospectus, and the documents incorporated by reference in this prospectus supplement that address activities, events, or developments that we expect or anticipate will or may occur in the future are forward looking-statements, including such things as:

 

·declines or volatility in the prices we receive for our oil and natural gas;
·our ability to raise additional capital to fund future capital expenditures;
·our ability to generate sufficient cash flow from operations, borrowings, or other sources to enable us to fully develop and produce our oil and natural gas properties;
·general economic conditions, whether internationally, nationally, or in the regional and local market areas in which we do business;
·risks associated with drilling, including completion risks, cost overruns, and the drilling of non-economic wells or dry holes;
·uncertainties associated with estimates of proved oil and natural gas reserves;
·the presence or recoverability of estimated oil and natural gas reserves and the actual future production rates and associated costs;
·risks and liabilities associated with acquired companies and properties;
·the completion of the pending acquisition, including the satisfaction of conditions for such completion;
·risks related to integration of acquired companies and properties;
·potential defects in title to our properties;
·cost and availability of drilling rigs, equipment, supplies, personnel, and oilfield services;
·geological concentration of our reserves;
·environmental or other governmental regulations, including legislation of hydraulic fracture stimulation;
·our ability to secure firm transportation for oil and natural gas we produce and to sell the oil and natural gas at market prices;
·exploration and development risks;
·management’s ability to execute our plans to meet our goals;
·our ability to retain key members of our management team;
·weather conditions;
·actions or inactions of third-party operators of our properties;
·costs and liabilities associated with environmental, health and safety laws;
·our ability to find and retain highly skilled personnel;
·operating hazards attendant to the oil and natural gas business;
·competition in the oil and natural gas industry; and
·the risk factors discussed under the heading “Risk Factors” in this prospectus supplement, the accompanying prospectus, and those discussed in the documents we have incorporated by reference.

 

All forward-looking statements, expressed or implied, included in this prospectus supplement, the accompanying prospectus, and the documents we incorporate by reference are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

 

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this prospectus supplement.

 

S-3
 

 

PROSPECTUS SUPPLEMENT SUMMARY

 

This summary provides a brief overview of information contained elsewhere in or incorporated by reference into this prospectus supplement and the accompanying prospectus. Because it is abbreviated, this summary does not contain all of the information that you should consider before investing in our common stock. You should carefully read this entire prospectus supplement, the accompanying prospectus, and any free writing prospectus distributed by us before making an investment decision, including the information presented under the headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this prospectus supplement and the financial statements and other information included in or incorporated by reference into this prospectus supplement and the accompanying prospectus.

 

In this prospectus supplement, the terms “Ring,” “Ring Energy,” “the Company,” “we,” “our,” “ours,” and “us” refer to Ring Energy, Inc. and its subsidiaries, except where the context otherwise requires or as otherwise indicated. Unless otherwise noted, pro forma data gives effect to the consummation of the pending acquisition as described under “—Recent Developments—Pending Acquisition,” as well as the consummation of this offering of our common stock and the use of proceeds as described under “Use of Proceeds,” in each case as if such transactions had closed immediately prior to the beginning of the period presented or as of the date presented.

 

Overview

 

Ring is a Midland-based exploration and production company that is engaged in oil and natural gas acquisition, exploration, development, and production activities. Our exploration and production interests are currently focused in Texas and Kansas. The Company takes a conventional approach to its drilling program and seeks to develop its traditional core areas, as well as look for new growth opportunities.

 

The Company’s primary drilling operations target the Central Basin Platform in Andrews County and Gaines County, Texas. The Company also operates in Kansas, targeting the Mississippi Lime play in Gray, Finney, and Haskell counties.  

   

We spent approximately $143.0 million on acquisitions and capital projects during 2013 and 2014, and we intend to continually actively drill and develop our acreage in an effort to maximize stockholder value. Through December 31, 2014, Ring’s proved reserves were 10.4 million BOE (barrel of oil equivalent). Effectively, 100% of its reserves relate to properties located in Texas. The Company’s proved reserves are oil-weighted with 98% of proved reserves consisting of oil and 2% consisting of natural gas. Of those reserves, 35% of the proved reserves are classified as proved developed producing, or “PDP,” 8% are classified as proved developed non-producing, or “PDNP,” and approximately 57% are classified as proved undeveloped, or “PUD.” See “— Summary Historical and Pro Forma Reserve Data.”

 

As of December 31, 2014, our estimated proved reserves had a pre-tax “PV10” (present value of future net revenues before income taxes discounted at 10%) of approximately $281.7 million and a Standardized Measure of Discounted Future Net Cash Flows of approximately $196.3 million. The difference between these two amounts is the effect of income taxes. The Company presents the pre-tax PV10 value, which is a non-GAAP financial measure, because it is a widely used industry standard that we believe is useful to those who may review this prospectus supplement when comparing our asset base and performance to other comparable oil and gas exploration and production companies.

 

Our Texas and Kansas Properties

 

Andrews and Gaines Counties leases – Andrews and Gaines Counties, Texas. In 2011, we acquired a 100% working interest and a 75% net revenue interest in leases in Andrews and Gaines Counties, Texas. Since that time, we have acquired working and net revenue interests in additional producing leases and acquired additional undeveloped acreage in and around our Andrews County leases. The working interests range from 2% to 100% and the net revenue interests range from 2% to 80%. In total, we owned 29,738 gross acres, with 5,835 acres developed and held by production and the remaining 23,903 acres being undeveloped, as of December 31, 2014. We believe the Andrews County leases contain a considerable number of remaining potential drilling locations. Our proved reserve estimate includes 239 PUD wells.

 

S-4
 

 

Kansas Properties – Gray, Finney, and Haskell Counties, Kansas. In 2012, we acquired a 100% working interest and an 80% net revenue interest in 9,541 net mineral acres and a 95% working interest and a 76% net revenue interest in 1,600 net mineral acres, along with all production, in leases located in Gray, Finney, and Haskell Counties, Kansas. We acquired a 100% working interest and an 80% net revenue interest in 4,698 net mineral acres in addition to our existing acreage acquired in 2012. We have subsequently leased additional acreage in Kansas, bringing our total acreage position to 18,277 gross acres. There was no production associated with the acquisition. In October 2013, we entered into a Joint Development Agreement with Torchlight Energy Resources, Inc. (“Torchlight”), whereby Torchlight agreed to pay approximately $6.2 million in development costs in return for a 50% working interest in this acreage. There are 17 total wells on the acreage, of which five (5) are currently producing. We believe this acreage has significant potential.

 

Our Business Strategy

 

Our objective is to increase stockholder value through the implementation of our business strategy focused on strategic development and growth. Key elements of our business strategy include:

 

·Growing production and reserves by developing our oil-rich resource base. Ring intends to actively drill and develop its acreage base in an effort to maximize its value and resource potential. Ring’s portfolio of proved oil and natural gas reserves consists of 98% oil and 2% natural gas. Of those reserves, 35% of the proved reserves are classified as proved developed producing, or “PDP,” 8% are classified as proved developed non-producing, or “PDNP,” and approximately 57% are classified as proved undeveloped, or “PUD.” Through the conversion of undeveloped reserves to developed reserves, Ring will seek to increase production, reserves, and cash flow while gaining favorable returns on invested capital.

 

·Employ industry leading drilling and completion techniques. Ring’s executive team, which has over 100 years combined experience in the oil and gas industry, intends to utilize new and innovative technological advancements and careful geological evaluation in reservoir engineering to generate value for its stockholders and to build development opportunities for years to come. Improved efficiency through employing technological advancements can provide a significant benefit in a continuous drilling program such as the one Ring contemplates for its current inventory of drilling locations. Additionally, Ring believes that the experience of its executive team will help reduce the time and cost associated with drilling and completing both conventional and horizontal wells, while potentially increasing recovery.

 

·Pursue strategic acquisitions with exceptional upside potential. Ring has a history of acquiring leasehold positions that it believes to have substantial resource potential and enables Ring to meet its targeted returns on invested capital. Ring has historically pursued acquisitions of properties that it believes to have exploitation and development potential comparable to its existing inventory of drilling locations. The Company has developed and refined an acquisition program designed to increase reserves and complement existing core properties. Ring’s experienced team of management and engineering professionals identify and evaluate acquisition opportunities, negotiate and close purchases, and manage acquired properties. Management intends to continue to pursue strategic acquisitions that meet the Company’s operational and financial targets. The executive team, with its extensive experience in the Permian Basin, has many relationships with operators and service providers in the region. Ring believes that leveraging its contacts is a competitive advantage in identifying acquisition targets. Management’s proven ability to evaluate resource potential will allow Ring to successfully acquire acreage and bring out more value in the assets.

 

Our Competitive Strengths

 

We believe we have the following competitive strengths that will support our efforts to successfully execute our business strategy:

 

·High quality asset base in one of North America’s leading resource plays. Ring’s acreage in the Permian Basin is all located in Andrews and Gaines Counties, which is in the heart of the Central Basin Platform. The Central Basin Platform is a NW-SE trending uplifted basement block that separates the Midland Basin (to the east) from the Delaware Basin (to the west). As of December 31, 2014, Ring drilled 180 wells on its acreage and re-stimulated 27 existing wells. As of December 31, 2014, estimated net proved reserves were comprised of approximately 98% oil and 2% natural gas.

 

S-5
 

 

·De-risked Permian acreage position with multi-year vertical drilling inventory. As of December 31, 2014, Ring has drilled 180 gross operated wells across its leasehold position with a 100% success rate. The Company has also re-stimulated 27 existing wells with attractive well economics. Ring has identified a multi-year inventory of potential drilling locations that will drive reserves and production growth and provide attractive return opportunities. As of December 31, 2014, Ring has 239 identified proven vertical drilling locations in its proved undeveloped reserves. It believes it has an additional 2,480 potential locations based on 10-acre downspacing. The Company views this drilling inventory as de-risked because of the significant production history in the area and well-established industry activity surrounding the acreage.

 

·Experienced and proven management team focused on the Permian Basin. The executive team has an average of approximately 22 years of industry experience per person, most of which has been focused in the Permian Basin. The Company believes its management and technical team is one of the principal competitive strengths due to the team’s proven ability to identify and integrate acquisitions, focus on cost efficiencies while managing a large-scale development program, and disciplined allocation of capital to high-returning projects. Our Chief Executive Officer, Kelly Hoffman, has had a successful career in the Permian Basin since 1975 when he started with Amoco Production Company and found further success in West Texas when he co-founded AOCO. In addition, Chairman of the Board, Lloyd T. Rochford, and Director, Stanley M. McCabe, formed Arena Resources, Inc. (“Arena”) in 2001, which operated in the same proximate area as Ring’s Andrews and Gaines County acreage. Arena sold to SandRidge Energy, Inc., in July 2010 for $1.6 billion. Ring’s management team aims to execute a similar growth strategy and development plan by leveraging its industry relationships and significant operational experience in these regions.

 

·Concentrated acreage position with high degree of operational control. Ring operates approximately 99% of its Permian Basin and Kansas acreage positions. The operating control allows Ring to implement and benefit from its strategy of enhancing returns through operational and cost efficiencies. Additionally, as the operator of substantially all of acreage, Ring retains the ability to adjust its capital expenditures based on well performance and commodity price forecasts.

 

Recent Developments

 

Pending Acquisition

 

On May 21, 2015, we entered into a purchase and sale agreement (the “Purchase Agreement”), dated effective May 1, 2015, with Finley Production Co., LP, BDT Oil & Gas, LP, Metcalfe Oil, LP, Grasslands Energy LP, Buffalo Oil & Gas, LP and Finley Resources, Inc., as sellers (collectively, “Sellers”), to acquire oil and gas assets (the “Acquisition”). The assets to be acquired by Ring under the Purchase Agreement consist of oil and gas assets and properties, which are located in the Ford West Field and Ford Geraldine Unit in Reeves and Culberson Counties, in the State of Texas. Under the terms of the Purchase Agreement, Ring agreed to acquire the oil and gas assets from Sellers for a purchase price of $75,000,000, subject to customary purchase price adjustments based on, among other things, environmental and title defects, if any.

 

Upon the execution of the Purchase Agreement, Ring deposited $7,500,000 in escrow pending closing. SunTrust Robinson Humphrey, Inc. served as exclusive financial advisor for Ring on the Acquisition. The Purchase Agreement contains customary representations and warranties and covenants by each party. Ring’s and the Sellers’ obligations to close the transaction are conditioned upon customary closing conditions including, among other things, the accuracy of representations and warranties and the performance of covenants. The Purchase Agreement may be terminated by mutual consent, a material breach of the Purchase Agreement, or if closing does not occur by June 30, 2015. There can be no assurance that the conditions to closing the transaction will be satisfied.

 

S-6
 

 

Revolving Credit Facility Commitment

 

On May 21, 2015, in connection with its entry into the Purchase Agreement, Ring entered into a commitment letter with SunTrust Bank, as administrative agent, and SunTrust Robinson Humphrey, Inc., as lead arranger, to amend Ring’s five year senior secured revolving credit facility (the “Revolving Credit Facility”). The amended Revolving Credit Facility (the “Amended Revolving Credit Facility”) is expected to increase the maximum facility amount from $150,000,000 to $500,000,000, with an initial borrowing base of $100,000,000. The maturity date is expected to be extended to five (5) years from the date on which all conditions are met and the initial funding has occurred under the Amended Revolving Credit Facility. The Amended Revolving Credit Facility is expected to contain customary affirmative and negative covenants and restrictions typical for a senior secured borrowing base credit facility. The Amended Revolving Credit Facility will be secured by a first priority security interest in substantially all of the assets of Ring, including the assets acquired in the Acquisition.

 

The commitment letter expires on the earliest to occur of (i) the consummation of the Acquisition, (ii) termination of the Purchase Agreement, either by its terms or by a court of competent jurisdiction, or (iii) July 31, 2015.

 

Corporate Information

 

Our principal executive offices are located at 901 West Wall St., 3rd Floor, Midland, TX 79702. Our telephone number is (432) 682-7464. Our website is www.ringenergy.com. Information contained on or accessible through our website is not incorporated by reference into or otherwise a part of this prospectus supplement or the accompanying prospectus.

 

S-7
 

 

THE OFFERING

 

Issuer   Ring Energy, Inc.
     
Common stock offered by us   4,500,000 shares
     
Common stock outstanding immediately after this offering   30,276,342 shares (or 30,951,342 shares if the underwriters exercise the over-allotment option in full)
     
Over-allotment option   We have granted the underwriters a 30-day option to purchase up to an aggregate of 675,000 additional shares of our common stock to cover any over-allotments.
     
Use of proceeds   We plan to use the net proceeds of this offering to fund the pending acquisition as described in “Prospectus Supplement Summary Recent Developments Pending Acquisition.”   If the pending acquisition is not consummated, we intend to use the net proceeds of this offering to fund a portion of our exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital. See “Use of Proceeds.”
     
Dividend policy   We have not declared or paid any cash or other dividends on our common stock, and we do not expect to declare or pay any cash or other dividends in the foreseeable future. See “Dividend Policy.”
     
Risk factors   You should carefully read and consider the information beginning on page
S-12 of this prospectus supplement and page 1 of the accompanying prospectus set forth under the headings “Risk Factors” and all other information set forth in this prospectus supplement, the accompanying prospectus, and the documents incorporated herein and therein by reference before deciding to invest in our common stock.
     
Conflicts of Interest   We may use a portion of the net proceeds of this offering to repay indebtedness owed by us to affiliates of the underwriters that are lenders under our Revolving Credit Facility. See “Use of Proceeds.” Because such repayment may constitute more than 5% of the net proceeds, this offering will be made in compliance with the applicable provisions of Rule 5121 of the Financial Industry Regulatory Authority, Inc. The appointment of a “qualified independent underwriter” is required in connection with this offering. See “Underwriting (Conflicts of Interest) — Conflicts of Interest.”
     
NYSE MKT symbol   REI

 

The number of shares to be outstanding after this offering is based on 25,776,342 shares of our common stock outstanding as of June 12, 2015 and excludes 2,638,250 shares that may be issued pursuant to outstanding awards under our equity compensation plans. Unless otherwise indicated, the information in this prospectus supplement assumes that the underwriters will not exercise their over-allotment option.

 

S-8
 

 

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

 

The following table sets forth our summary historical consolidated financial data as of and for each of the periods indicated. The summary historical consolidated financial data as of and for the years ended December 31, 2014, 2013, and 2012 are derived from our historical audited consolidated financial statements appearing in our Annual Reports on Form 10-K for the years ended December 31, 2014 and 2013, which are incorporated by reference into this prospectus supplement. The summary consolidated financial data as of and for the three months ended March 31, 2015 and 2014 have been derived from our unaudited consolidated financial statements appearing in our Quarterly Report on Form 10-Q for the quarter ending March 31, 2015, which is incorporated by reference into this prospectus supplement. Operating results for the periods presented below are not necessarily indicative of results that may be expected for any future periods. The summary pro forma consolidated financial data for the year ended December 31, 2014 and the three months ended March 31, 2015 has been derived from the unaudited pro forma consolidated financial statements and related notes included as Exhibit 99.2 to our Form 8-K filed with the SEC on May 22, 2015, as amended by Form 8-K/A, filed on June 12, 2015, and the audited statements of revenues and direct operating expenses of the properties to be acquired in the Acquisition for the years ended December 31, 2014 and 2013 and unaudited statements of revenues and direct operating costs of the properties to be acquired in the Acquisition for the three months ended March 31, 2015, each included as Exhibits 99.1 and 99.2 to our Form 8-K filed with the SEC on May 22, 2015, as amended by Form 8-K/A, filed on June 12, 2015, and incorporated by reference in this prospectus supplement. Pro forma data give effect to the consummation of the Acquisition as well as the Amended Revolving Credit Facility, as described under “—Recent Developments,” in each case as if such transactions had closed immediately prior to the beginning of the period presented or as of the date presented. Pro forma financial data are not necessarily representative of the results we would have achieved if we had owned the properties being acquired in the Acquisition during the periods presented.

 

You should review this information together with “Risk Factors,” “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated historical financial statements and related notes included, as applicable, in this prospectus supplement and our Annual Report on Form 10-K for the year ended December 31, 2014, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and our subsequent filings with the SEC, in each case, incorporated by reference into this prospectus supplement and the accompanying prospectus. Historical results are not necessarily indicative of results that may be expected for any future period.

 

   Pro Forma         
  

Three Months

Ended

  

Year

Ended

   Three Months Ended March 31,   Year Ended December 31, 
  

March 31,

2015

  

December 31,

2014

   2015   2014   2014   2013   2012 
Statement of Operations Data:                                   
Oil and Gas Revenues  $9,891,656   $74,303,242   $6,045,701   $5,970,452   $38,089,443   $10,315,701   $1,757,444 
                                    
Costs and Operating Expenses                                   
Oil and gas production costs   3,709,024    16,532,053    1,867,795    771,100    4,993,166    1,207,529    785,959 
Oil and gas production taxes   462,189    3,514,215    277,031    275,961    1,760,206    476,964    82,995 
Depreciation, depletion and amortization   5,349,112    18,561,677    3,654,298    1,530,196    11,807,794    2,284,091    506,786 
Asset retirement obligation accretion   105,846    284,368    66,979    24,382    154,973    53,681    20,906 
General and administrative expenses   1,728,987    6,803,029    1,728,987    1,564,461    6,803,029    6,682,760    2,392,645 
Total Costs and Operating Expenses   11,355,158    45,695,342    7,595,090    4,166,100    25,519,168    10,705,025    3,789,291 
                                    
Income (Loss) from Operations   (1,463,502)   28,607,900    (1,549,389)   1,804,352    12,570,275    (389,324)   (2,031,847)
                                    
Other Income (Expense)                                   
Gain on derivative put options   -    -    -    -    -    -    276,736 
Interest income   780    85,964    780    42,733    85,964    24,706    4,309 
Interest expense   (535,969)   (2,121,394)   -    -    -    (9,890)   (218,805)
Net Other Income   (535,189)   (2,035,430)   780    42,733    85,964    14,816    62,240 
                                    
Income (Loss) Before Provision for Income Taxes   (1,998,691)   26,572,470    (1,548,609)   1,847,085    12,656,239    (374,508)   (1,969,607)
(Provision for) Benefit from Income Taxes   739,515    (9,384,744)   572,985    (683,436)   (4,235,739)   (77,701)   300,324 
                                    
Net Income (Loss)  $(1,259,176)  $17,187,726   $(975,624)  $1,163,649   $8,420,500   $(452,209)  $(1,669,283)

 

S-9
 

 

   Pro Forma         
  

Three Months

Ended

  

Year

Ended

   Three Months Ended March 31,   Year Ended December 31, 
  

March 31,

2015

  

December 31,

2014

   2015   2014   2014   2013   2012 
                             
Cash Flow Data:                                   
Net Cash Provided by (Used in) Operating Activities            $(6,048,585)  $7,525,475   $33,748,065   $8,116,408   $(31,851)
Net Cash Used in Investing Activities             (9,786,025)   (22,103,993)   (106,206,099)   (34,439,182)   (10,377,549)
Net Cash Provided by Financing Activities (Used in)             10,062,500    (39,219)   28,729,686    73,269,190    15,802,195 
                                    
Balance Sheet Data (at period end):                                   
Total Current Assets  $8,854,881        $8,854,881   $40,661,186   $15,083,298   $56,305,036   $5,882,530 
Net Properties and Equipment   236,140,551         158,721,464    76,586,611    152,558,162    55,418,382    22,630,848 
Total Assets   244,995,432         167,576,345    117,247,797    167,641,460    111,723,418    28,513,378 
Total Current Liabilities   6,930,803         6,930,803    9,669,834    16,263,051    7,231,643    1,191,431 
Long-Term Debt   85,000,000         10,000,000    -    -    -    - 
Total Liabilities   102,711,338         25,292,251    12,858,145    25,098,930    9,117,704    2,313,667 
Total Stockholders’ Equity   142,284,094         142,284,094    104,389,652    142,542,530    102,605,714    26,199,711 

 

Reserve Quantities Information – Proved reserves are estimated reserves of crude oil (including condensate and natural gas liquids) 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 developed reserves are those expected to be recovered through existing wells, equipment and methods. The historical data is based on reserve reports prepared by Cawley, Gillespie & Associates, Inc., our independent reserve engineers. The pro forma data has been prepared by our internal reserve engineers.

 

   Pro Forma   Historical   Historical 
  

Year Ended

December 31,

2014

  

Year Ended

December 31,

2014

  

Year Ended

December 31,

2013

 
Proved Reserves               
Oil (Barrels)   13,938,421*   10,242,291    6,855,655 
Gas (MCF)   7,145,631*   988,310    2,487,043 

 

* Proved Undeveloped Reserves associated with the Acquisition are still being evaluated and are not included in the pro forma.

 

Standardized Measure of Discounted Future Net Cash Flows – The following tables summarize, on an historical basis and pro forma basis (assuming the consummation of the pending acquisition prior to the beginning of the period presented), the standardized measure of discounted future net cash flows and the changes in the standardized measure of discounted future net cash flows.

 

The standardized measure of discounted future net cash flows is computed by applying year-end prices of oil and gas to the estimated future production of proved oil and 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 the tax basis of the properties and available credits, and assuming continuation of existing economic conditions. The estimated future net cash flows are then discounted using a rate of 10 percent per year to reflect the estimated timing of the future cash flows.

 

December 31, 

Pro Forma

2014

  

Historical

2014

 
Future cash inflows  $1,237,574,376   $875,492,876 
Future production costs   (340,113,591)   (217,842,533)
Future development costs   (113,073,539)   (113,073,539)
Future income taxes   (222,766,853)   (165,083,198)
Future net cash flows   561,620,393    379,493,606 
10% annual discount for estimated timing of cash flows   (263,118,543)   (183,148,613)
Standardized Measure of Discounted Future Net Cash Flows  $298,501,850   $196,344,993 

 

S-10
 

 

Changes in the Standardized Measure of Discounted Future Net Cash Flows

 

December 31, 

Pro Forma

2014

  

Historical

2014

 
Beginning of the year  $250,284,067   $133,947,927 
Purchase of minerals in place   89,152,815    89,152,815 
Extensions, discoveries and improved recovery, less related costs   39,903,356    39,903,356 
Development costs incurred during the year   100,588,254    90,562,299 
Sales of oil and gas produced, net of production costs   (56,017,179)   (33,096,276)
Sales of minerals in place   -    - 
Accretion of discount   27,839,355    16,564,967 
Net changes in price and production costs   (39,149,085)   (30,191,382)
Net change in estimated future development costs   (36,628,461)   (31,004,796)
Revision of previous quantity estimates   (15,044,380)   (15,044,380)
Revision of estimated timing of cash flows   (49,142,972)   (43,530,618)
Net change in income taxes   (13,283,920)   (20,918,919)
End of Year  $298,501,850   $196,344,993 

 

S-11
 

 

RISK FACTORS

 

An investment in our common stock involves risks. Prior to making a decision about investing in our common stock, you should carefully consider the risk factors listed below and discussed under the heading “Risk Factors” in the accompanying underlying prospectus and in our Annual Report on Form 10-K for the year ended December 31, 2014, which is incorporated herein by reference. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. If any of these risks actually occurs, our business, results of operations, and financial condition could suffer, and you could lose your investment in us.

 

Risks Related to the Acquisition

 

Our analysis of the properties subject to the Acquisition was based in part on information provided to us by the Sellers and the limited representations, warranties, and indemnifications of the Sellers contained in the Purchase Agreement, which may prove to be incorrect, resulting in our not realizing the expected benefits of the Acquisition.

 

Our analysis of the properties subject to the Acquisition, including our estimates of the associated proved reserves, is based in part on information provided to us by the Sellers, including historical production data. Our independent reserve engineers have not provided a report regarding the estimates of reserves with respect to the properties subject to the Acquisition. As a result, the assumptions on which our internal estimates of proved reserves and drilling locations included in or incorporated by reference into this prospectus supplement have been based may prove to be incorrect in a number of material ways, resulting in our not realizing our expected benefits of these acquisitions. In addition, the representations, warranties, and indemnities of the Sellers contained in the Purchase Agreement are limited, and we may not have recourse against the Sellers in the event that the acreage does not perform as expected.

 

The Purchase Agreement for the Acquisition contains conditions to closing, some of which are beyond our control, and we may be unable to consummate the Acquisition.

 

The Purchase Agreement for the Acquisition contains closing conditions, including satisfaction with title and environmental due diligence. It is possible that one or more of the conditions in the Purchase Agreement will not be satisfied, and we may be unable or unwilling to consummate the Acquisition. If the Acquisition is not closed, under certain circumstances, we may be required to forfeit our $7.5 million escrow deposit under the Purchase Agreement. If we are unable to close the Acquisition, our common stock price could be adversely affected.

 

Closing of this offering of common stock is not conditioned on the closing of the Acquisition. If the Acquisition is not consummated, we intend to use any remaining net proceeds to fund a portion of our exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital.

 

The Acquisition involves risks associated with acquisitions and integrating acquired properties, including the potential exposure to significant liabilities, and the intended benefits of the Acquisition may not be realized.

 

The Acquisition involves risks associated with acquisitions and integrating acquired properties into existing operations, including that:

 

·our senior management’s attention may be diverted from the management of daily operations to the integration of the assets acquired in the Acquisition;

 

·we could incur significant unknown and contingent liabilities for which we have limited or no contractual remedies or insurance coverage;

 

·the properties acquired in the Acquisition may not perform as well as we anticipate; and

 

S-12
 

 

·unexpected costs, delays, and challenges may arise in integrating the assets acquired in the Acquisition into our existing operations.

 

Even if we successfully integrate the properties acquired in the Acquisition into our operations, it may not be possible to realize the full benefits we anticipate or we may not realize these benefits within the expected timeframe. If we fail to realize the benefits we anticipate from the Acquisition, then our business, results of operations, and financial condition may be adversely affected.

 

Risks Relating to Our Common Stock and this Offering

 

We have no plans to pay dividends on our common stock. Stockholders may not receive funds without selling their shares.

 

We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon various factors, including our business, financial condition, results of operations, capital requirements, and investment opportunities.

 

Our board of directors can, without stockholder approval, cause preferred stock to be issued on terms that adversely affect common stockholders.

 

Under our Articles of Incorporation, our board of directors is authorized to issue up to 50,000,000 shares of preferred stock, of which none are issued and outstanding as of the date of this prospectus supplement. Also, our board of directors, without stockholder approval, may determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares. If the board causes shares of preferred stock to be issued, the rights of the holders of our common stock could be adversely affected. The board’s ability to determine the terms of preferred stock and to cause its issuance, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. Preferred shares issued by the board of directors could include voting rights, or even super voting rights, which could shift the ability to control the company to the holders of the preferred stock. Preferred stock could also have conversion rights into shares of common stock at a discount to the market price of the common stock which could negatively affect the market for our common stock. In addition, preferred stock would have preference in the event of liquidation of the corporation, which means that the holders of preferred stock would be entitled to receive the net assets of the corporation distributed in liquidation before the common stock holders receive any distribution of the liquidated assets. We have no current plans to issue any shares of preferred stock.

 

Provisions under Nevada law could delay or prevent a change in control of Ring, which could adversely affect the price of our common stock.

 

In addition to the ability of the board of directors to issue preferred stock, the existence of some provisions under Nevada law could delay or prevent a change in control of Ring, which could adversely affect the price of our common stock. Nevada law imposes some restrictions on mergers and other business combinations between us and any holder of 10% or more of our outstanding common stock.

 

The price of our common stock may fluctuate significantly, which could negatively affect us and holders of our common stock.

 

The trading price of our common stock may fluctuate significantly in response to a number of factors, many of which are beyond our control. For instance, if our financial results are below the expectations of securities analysts and investors, the market price of our common stock could decrease, perhaps significantly. Other factors that may affect the market price of our common stock include:

 

·actual or anticipated fluctuations in our quarterly results of operations;
·liquidity;
·sales of common stock by our stockholders;

 

S-13
 

 

·changes in oil and natural gas prices;
·changes in our cash flow from operations or earnings estimates;
·publication of research reports about us or the oil and natural gas exploration and production industry generally;
·competition for, among other things, capital, acquisition of reserves, undeveloped land, and skilled personnel;
·increases in market interest rates which may increase our cost of capital;
·changes in applicable laws or regulations, court rulings, and enforcement and legal actions;
·changes in market valuations of similar companies;
·adverse market reaction to any indebtedness we may incur in the future;
·additions or departures of key management personnel;
·actions by our stockholders;
·commencement of or involvement in litigation;
·news reports relating to trends, concerns, technological or competitive developments, regulatory changes, and other related issues in our industry;
·speculation in the press or investment community regarding our business;
·political conditions in oil and natural gas producing regions;
·general market and economic conditions; and
·domestic and international economic, legal, and regulatory factors unrelated to our performance.

 

In addition, the U.S. securities markets have experienced significant price and volume fluctuations. These fluctuations often have been unrelated to the operating performance of companies in these markets. Market fluctuations and broad market, economic, and industry factors may negatively affect the price of our common stock, regardless of our operating performance. Any volatility or a significant decrease in the market price of our common stock could also negatively affect our ability to make acquisitions using common stock. Further, if we were to be the object of securities class action litigation as a result of volatility in our common stock price or for other reasons, it could result in substantial costs and diversion of our management’s attention and resources, which could negatively affect our financial results.

 

We have broad discretion in the use the net proceeds that we will receive from this offering and may not use them in a manner in which our stockholders would consider appropriate.

 

We plan to use the net proceeds of this offering to fund the Acquisition. See “Prospectus Supplement Summary — Recent Developments — Pending Acquisition.” We may also use the net proceeds of the offering to repay outstanding indebtedness under our Revolving Credit Facility. The offering is not contingent on the completion of the Acquisition, and if the Acquisition is not completed, we will not have any obligation to repurchase the shares of common stock sold in this offering. If the Acquisition is not consummated, we intend to use any remaining net proceeds to fund a portion of our exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital. Our stockholders may not agree with the manner in which our management chooses to allocate and spend these funds. The failure by our management to apply these funds effectively could have a material adverse effect on our business.

 

Affiliates of SunTrust Robinson Humphrey, Inc. may receive a portion of the offering proceeds through our repayment of amounts under our Revolving Credit Facility.

 

Affiliates of SunTrust Robinson Humphrey, Inc. are lenders under our Revolving Credit Facility, and they may receive more than 5% of the net proceeds of this offering in connection with the repayment of amounts under such credit agreement. Accordingly, SunTrust Robinson Humphrey, Inc. may be deemed to receive financial benefits as a result of the consummation of this offering beyond the benefits customarily received by underwriters in similar offerings. See "Underwriting (Conflicts of Interest)".

 

S-14
 

 

Investors in this offering will experience immediate and substantial dilution and additional stock offerings may further dilute stockholders.

 

The public offering price of the securities offered pursuant to this prospectus supplement is substantially higher than the net tangible book value per share of our common stock, which was $5.52 per share as of March 31, 2015. Therefore, if you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the pro forma net tangible book value per share of common stock from the price per share that you pay for the common stock. If the holders of outstanding options exercise those options at prices below the public offering price, you will incur further dilution.

 

Given our plans and our expectation that we may need additional capital and personnel, we may need to issue additional shares of common stock or securities convertible into or exercisable for shares of common stock, including preferred stock, options, or warrants. The issuance of additional common stock may further dilute the ownership of our stockholders.

 

S-15
 

 

USE OF PROCEEDS

 

We estimate that the net proceeds from this offering of common stock will be approximately $48.9 million, after deducting the underwriting commissions and estimated offering expenses payable by us (or approximately $56.3 million if the underwriters’ option to purchase additional shares is exercised in full). We plan to use the net proceeds of this offering to fund the Acquisition. See “Prospectus Supplement Summary — Recent Developments — Pending Acquisition.” We may also use the net proceeds of the offering to repay outstanding indebtedness under our Revolving Credit Facility. The offering is not contingent on the completion of the Acquisition, and if the Acquisition is not completed, we will not have any obligation to repurchase the shares of common stock sold in this offering.

 

If the Acquisition is not consummated, we intend to use any remaining net proceeds to fund a portion of our exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions, repayment of indebtedness, and working capital.

 

As of June 1, 2015, our Revolving Credit Facility, which matures on July 1, 2019, had $17.5 million of borrowings outstanding and an interest rate of approximately 2.6% per annum.

 

Certain of the underwriters are acting, and will continue to act, as lenders under our Revolving Credit Facility and, in such capacity, may receive net proceeds from this offering used to repay borrowings outstanding thereunder. See “Underwriting (Conflicts of Interest).”

 

S-16
 

 

CAPITALIZATION

 

The following table sets forth, on an unaudited basis, our cash and cash equivalents, and capitalization as of March 31, 2015, on an actual basis and on an as adjusted basis, giving effect to the sale of 4,500,000 shares of common stock in this offering at the public offering price of $11.50 per share, after deducting underwriting discounts and commissions and estimated offering expenses, and the Amended Revolving Credit Facility. The table below should be read in conjunction with, and is qualified in its entirety by reference to “Use of Proceeds” in this prospectus supplement and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K for the year ended December 31, 2014, and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, which are incorporated by reference herein.

 

   As of March 31, 2015 
   Actual   As Adjusted 
Cash and cash equivalents  $2,850,125   $2,850,125 
Debt:          
Amended Revolving Credit Facility   10,000,000    10,000,000 
Stockholders' Equity:          
Preferred stock - $0.001 par value; 50,000,000 shares authorized; no shares issued or outstanding   -      
Common stock - $0.001 par value; 150,000,000 shares authorized; 25,767,582 shares and 30,267,582 shares issued and outstanding, respectively   25,767    30,267 
Additional paid-in capital   141,249,478    190,187,478 
Retained Earnings   1,008,849    1,008,849 
Total Stockholders’ Equity  $142,284,094    191,226,594 

 

S-17
 

 

PRICE RANGE OF OUR COMMON STOCK

 

Our common stock is listed and traded on the NYSE MKT under the symbol “REI.” The following table sets forth the range of high and low sales prices of our common stock for the periods presented:

 

   Common Stock 
   High   Low 
Year ending December 31, 2015          
Second Quarter (through June 17, 2015)  $13.14   $11.36 
First Quarter   10.70    10.24 
Year ending December 31, 2014          
Fourth quarter   10.61    9.88 
Third quarter   15.06    14.73 
Second quarter   17.50    16.36 
First quarter   15.35    14.73 
Year ending December 31, 2013          
Fourth quarter   12.50    12.07 
Third quarter   14.59    13.05 
Second quarter   8.76    8.50 
First quarter   6.95    6.95 

 

The closing price of our common stock on the NYSE MKT on June 17, 2015 was $13.00 per share. On June 12, 2015 we had 25,776,342 issued and outstanding shares of common stock, which were held by 3,800 holders of record. Holders of record do not include owners for whom common stock may be held in “street” name or whose common stock is restricted.

 

DIVIDEND POLICY

 

We have never declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. Any future determination as to the declaration and payment of dividends will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors that our board of directors considers relevant. In addition, the terms of our Revolving Credit Facility restrict the payment of dividends to the holders of our common stock and any other equity holders.

 

S-18
 

 

UNDERWRITING (CONFLICTS OF INTEREST)

 

We are offering the shares of common stock described in this prospectus supplement through the underwriters named below. SunTrust Robinson Humphrey, Inc. is acting as the representative of the underwriters named below. Subject to the terms and conditions of the underwriting agreement between us and the representative, we have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus supplement, the number of shares of common stock listed next to its name in the following table:

 

Name  Number of Shares 
SunTrust Robinson Humphrey, Inc.   2,475,000 
Seaport Global Securities LLC   675,000 
Euro Pacific Capital Inc.   562,500 
IBERIA Capital Partners L.L.C.   225,000 
Northland Capital Markets   225,000 
Roth Capital Partners, LLC   225,000 
Ladenburg Thalmann & Co. Inc.   112,500 
Total   4,500,000 

  

“Northland Capital Markets” is the trade name for certain capital markets and investment banking services of Northland Securities, Inc., member, FINRA/SIPC.

 

The underwriting agreement provides that the underwriters’ obligation to purchase our common stock is subject to approval of legal matters by counsel and the satisfaction of the conditions contained in the underwriting agreement. The conditions contained in the underwriting agreement include the conditions that the representations and warranties made by us to the underwriters are true, that there has been no material adverse change to our condition or in the financial markets, and that we deliver to the underwriters customary closing documents. The underwriters are obligated to purchase all of the shares of common stock (other than those covered by the over-allotment option described below) if they purchase any of the shares of common stock.

 

Option to Purchase Additional Common Stock

 

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase up to 675,000 additional shares of common stock at the public offering price per share less the underwriting discount and commissions shown on the cover page of this prospectus supplement. The underwriters may exercise this option solely to cover over-allotments, if any, made in connection with this offering.

 

Underwriting Discount and Commissions and Offering Expenses

 

The underwriters propose to offer the common stock to the public at the public offering price set forth on the cover of this prospectus supplement. The underwriters may offer the common stock to securities dealers at the price to the public less a concession not in excess of $0.345 per share of common stock. After the common stock is released for sale to the public, the underwriters may vary the offering price and other selling terms from time to time.

 

The following table summarizes the compensation to be paid to the underwriters by us:

 

       Total 
   Per Share  

No Option

Exercise

  

Full Option

Exercise

 
Public offering price  $11.50   $51,750,000   $59,512,500 
Underwriting discounts and commissions  $0.575   $2,587,500   $2,975,625 
Proceeds, before expenses, to us  $10.925   $49,162,500   $56,536,875 

 

S-19
 

 

We estimate our expenses associated with the offering, excluding underwriting discounts and commissions, will be approximately $220,000, which amount includes up to $15,000 that we have agreed to reimburse the underwriters for fees and expenses of counsel relating to certain aspects of this offering.

 

We have agreed to pay a financial advisory fee of $35,000 to each of Cadence Bank, N.A. and Compass Bank, which amounts will reduce the total underwriting fees to be paid to the underwriters.

 

Indemnification

 

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the U.S. federal securities laws, or to contribute to payments that may be required to be made in respect of these liabilities.

 

Lock-Up Agreements

 

We and all of our directors and executive officers have agreed that, without the prior written consent of SunTrust Robinson Humphrey, Inc., we and they will not directly or indirectly, (1) offer for sale, sell, issue, contract to sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of our common stock or securities convertible into or exchangeable for our common stock (other than shares sold in this offering), or with respect to us, sell or grant options, rights or warrants with respect to any shares of our common stock or securities convertible into or exchangeable for our common stock (other than the issuance of options pursuant to a registration statement on Form S-8 and securities we may issue in future acquisitions of oil and gas properties or companies, which shares will remain subject to these lock-up restrictions upon issuance and for the remainder of the lock-up period), (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of our common stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of our common stock or other securities, in cash or otherwise, (3) offer to purchase, purchase or contract to purchase or grant any option, right or warrant to purchase our common stock or securities convertible, exercisable or exchangeable into our common stock or any other securities of the Company, (4) file or cause to be filed a registration statement, including any amendments, with respect to the registration of any shares of our common stock or securities convertible, exercisable or exchangeable into our common stock or any other securities of the Company (other than with respect to the Company, any registration statement on Form S-8 or any amendment to any registration statement already filed with the Commission as of the date of this prospectus supplement), (5) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in securities of the Company or (6) publicly disclose the intention to do any of the foregoing for a period of 90 days after the date of this prospectus supplement.

 

SunTrust Robinson Humphrey, Inc., in its sole discretion, may release the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice. When determining whether or not to release common stock and other securities from lock-up agreements, SunTrust Robinson Humphrey, Inc. will consider, among other factors, the holder’s reasons for requesting the release, the number of shares of common stock and other securities for which the release is being requested, and market conditions at the time.

 

Price Stabilization, Short Positions and Penalty Bids

 

The underwriters may engage in over-allotment, stabilizing transactions, syndicate covering transactions, and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves syndicate sales in excess of the offering size, which creates a syndicate short position. Covered short sales are sales made in an amount not greater than the number of shares available for purchase by the underwriters under their over-allotment option. The underwriters may close out a covered short sale by exercising their over-allotment option or purchasing shares in the open market. Naked short sales are sales made in an amount in excess of the number of shares available under the over-allotment option. The underwriters must close out any naked short sale by purchasing shares in the open market. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of shares of common stock in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the shares of common stock originally sold by such syndicate member is purchased in a syndicate covering transaction to cover syndicate short positions. Penalty bids may have the effect of deterring syndicate members from selling to people who have a history of quickly selling their shares. These stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of our common stock to be higher than it would otherwise be in the absence of these transactions.

 

S-20
 

 

The underwriters are not required to engage in these activities and may end any of these activities at any time.

 

Electronic Distribution

 

This prospectus supplement, the accompanying prospectus, and the documents incorporated herein and therein by reference in electronic format may be made available on the websites maintained by one or more of the underwriters. The underwriters may agree to allocate a number of shares of common stock for sale to their online brokerage account holders. The common stock will be allocated to underwriters that may make Internet distributions on the same basis as other allocations. In addition, common stock may be sold by the underwriters to securities dealers who resell common stock to online brokerage account holders.

 

Other than this prospectus supplement, the accompanying prospectus and the documents incorporated herein and therein by reference in electronic format, information contained in any website maintained by an underwriter is not part of this prospectus supplement, the accompanying prospectus, the documents incorporated herein and therein by reference or registration statement of which the prospectus supplement forms a part, has not been endorsed by us and should not be relied on by investors in deciding whether to purchase common stock. The underwriters are not responsible for information contained in websites that they do not maintain.

 

Relationship with the Underwriters

 

SunTrust Robinson Humphrey, Inc. acted as financial advisor to us in connection with the pending Acquisition, for which it received a customary fee. In addition, from time to time, certain of the underwriters and their respective affiliates have provided, and may continue to provide, investment banking services to us in the ordinary course of their businesses, and have received, and may continue to receive, compensation for such services.

 

Conflicts of Interest

 

Affiliates of SunTrust Robinson Humphrey, Inc. are lenders under our Revolving Credit Facility, and they may receive more than 5% of the net proceeds of this offering in connection with the repayment of amounts under such credit agreement. Accordingly, this offering is being made in compliance with the requirements of Rule 5121 of the Financial Industry Regulatory Authority, Inc. (FINRA). The appointment of Euro Pacific Capital Inc. as a “qualified independent underwriter” is required in connection with this offering pursuant to FINRA Rule 5121. In that role, Euro Pacific Capital Inc. has participated in the preparation of this prospectus supplement and has exercised its usual standards of due diligence with respect thereto. Euro Pacific Capital Inc. will not receive any additional compensation for acting as a qualified independent underwriter. In accordance with FINRA Rule 5121, SunTrust Robinson Humphrey, Inc. will not confirm any sales to any account over which they exercise discretionary authority without the specific written approval of the transaction from the account holder.

 

LEGAL MATTERS

 

Certain legal matters regarding the validity of the shares of common stock that are offered hereby will be passed upon for us by Burleson LLP. Certain legal matters will be passed upon for the underwriters by Goodwin Procter LLP, New York, New York.

 

EXPERTS

 

The consolidated financial statements of Ring Energy, Inc. appearing in Ring Energy’s Annual Report on Form 10-K for the year ended December 31, 2014, and the effectiveness of Ring Energy’s internal control over financial reporting as of December 31, 2014, have been audited by Eide Bailly LLP, an independent registered public accounting firm, as set forth in reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

 

S-21
 

 

The statements of revenues and direct operating expenses for the properties acquired in the pending acquisition incorporated by reference in this prospectus supplement has been audited by Eide Bailly LLP, an independent registered accounting firm, as stated in their report, which is incorporated herein by reference. Such financial statement has been so incorporated by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

 

The information included or incorporated by reference in this prospectus supplement regarding estimated quantities of proved reserves as of December 31, 2014 using SEC guidelines, were prepared or derived from estimates prepared by Cawley, Gillespie & Associates, Inc., independent petroleum engineers. These estimates are included in this prospectus supplement in reliance on the authority of such firm as experts in these matters.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We file annual, quarterly and special reports, proxy statements, and other information with the Securities and Exchange Commission, or SEC. You may read and copy this information at the following SEC location:

 

Public Reference Room

100 F Street, N.E.

Washington, D.C. 20549

 

You can also obtain copies of these documents at prescribed rates by writing to the Public Reference Room of the SEC. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. The SEC also maintains a web site that contains reports, proxy statements, and other information about issuers, like Ring Energy, Inc., who file electronically with the SEC. The address of that web site is www.sec.gov.

 

Unless specifically listed under “Incorporation of Certain Documents by Reference” below, the information contained on the SEC website is not incorporated by reference in this prospectus supplement and you should not consider that information a part of this prospectus supplement.

 

In addition, our common stock is listed on the NYSE MKT and similar information concerning us can be inspected and copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

 

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

 

The rules of the SEC allow us to “incorporate by reference” into this prospectus supplement and the accompanying prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to that information. The information incorporated by reference is considered to be part of this prospectus supplement and the accompanying prospectus, and later information that we file with the SEC will automatically update and supersede that information. We incorporate by reference the documents listed below and any future filings made by us with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until the offering of the common stock is completed (unless otherwise stated, other than information furnished under Items 2.02 or 7.01 of any Form 8-K, which is not deemed filed):

 

·Our Annual Report on Form 10-K for the year ended December 31, 2014, filed on March 16, 2015;

 

·Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, filed on May 6, 2015;

 

·Our Current Reports on Form 8-K filed on May 22, 2015, June 9, 2015, and June 18, 2015 and our Current Reports on Form 8-K/A filed on June 9, 2015 and June 12, 2015;

 

S-22
 

 

·Our definitive proxy statement on Schedule 14A, filed on May 19, 2015; and

 

·The description of our common stock contained in our Registration Statement on Form SB-2 filed with the SEC on January 12, 2007 and any amendments or reports filed for the purpose of updating that description.

 

All documents that we subsequently file pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, and that are deemed “filed” prior to the termination of this offering, shall be deemed to be incorporated by reference into this prospectus supplement.

 

Any statement contained in this prospectus supplement or in a document incorporated or deemed to be incorporated by reference in this prospectus supplement shall be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference modifies or supersedes the statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement.

 

You may obtain any of the documents incorporated by reference in this prospectus supplement from the SEC through the SEC’s website at the address provided above. We will provide you a copy of any or all of the information that has been incorporated by reference in this prospectus supplement (including exhibits to those documents specifically incorporated by reference in this document), at no cost, upon your written or oral request to us at the following address or telephone number:

 

Ring Energy, Inc.

901 West Wall St., 3rd Floor

Midland, TX 79702

Telephone: (432) 682-7464

Attn: Investor Relations

 

S-23
 

 

PROSPECTUS

RING ENERGY, INC.

 

$200,000,000

Common Stock

Preferred Stock

Debt Securities

Warrants

Units

 

This prospectus will allow us to issue up to an aggregate of $200,000,000 of our debt securities, common stock, preferred stock, warrants and units from time to time at prices and on terms to be determined at or prior to the time of the offering. We may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis. This prospectus describes the general terms of these securities. The specific terms of any securities and the specific manner in which we will offer them will be included in a supplement to this prospectus relating to that offering.

 

We encourage you to carefully read this prospectus and any applicable prospectus supplement before you invest in our securities. We also encourage you to read the documents we have referred you to in the “Where You Can Find More Information” section of this prospectus for information on us and for our financial statements. This prospectus may not be used to consummate sales of our securities unless accompanied by a prospectus supplement.

 

Our Common Stock is traded on the NYSE MKT under the symbol “REI”. On November 14, 2014, the last reported sales price of our Common Stock was $13.76 per share.

 

 

The securities offered in this prospectus involve risks. You should carefully consider the risks associated with any investment in our securities that are described in the applicable prospectus supplement and contained in our filings with the SEC as described in “Risk Factors” on page 1 of this prospectus.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is December 3, 2014

 

 
 

 

You should rely only on the information contained in this prospectus and in any relevant prospectus supplement or free writing prospectus, including any information incorporated herein or therein by reference. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should not assume that the information in this prospectus, any accompanying prospectus supplement, any free writing prospectus or any document incorporated by reference is accurate as of any date other than the date on its front cover. Our business, financial condition, results of operations and prospects may have changed since the date indicated on the front cover of such documents. Neither this prospectus nor any prospectus supplement or free writing prospectus constitutes an offer to sell or the solicitation of an offer to buy any securities other than the securities to which they relate, nor does this prospectus or a prospectus supplement or free writing prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS i
ABOUT RING ENERGY, INC. 1
RISK FACTORS 1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 1
WHERE YOU CAN FIND MORE INFORMATION 2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 2
USE OF PROCEEDS 3
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS 3
PLAN OF DISTRIBUTION 3
DESCRIPTION OF CAPITAL STOCK 4
DESCRIPTION OF DEBT SECURITIES 8
DESCRIPTION OF WARRANTS 13
DESCRIPTION OF UNITS 14
LEGAL MATTERS 14
EXPERTS 14

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this shelf process, we may sell the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. That prospectus supplement may include a discussion of any risk factors or other special considerations that apply to those securities. The prospectus supplement may also add, update or change the information in this prospectus. If there is any inconsistency between the information in this prospectus or any information incorporated by reference herein and in a prospectus supplement, you should rely on the information in that prospectus supplement. You should carefully read both this prospectus, any prospectus supplement, any free writing prospectus that we authorize to be distributed to you, and any information incorporated by reference into the foregoing, together with additional information described under the headings “Incorporation of Certain Information by Reference” and “Where You Can Find More Information” before buying any of the securities offered under this prospectus.

 

As used in this prospectus, the terms “Company,” “we,” “our,” “ours” and “us” refer to Ring Energy, Inc. and its subsidiaries, except where the context otherwise requires or as otherwise indicated.

 

i
 

 

ABOUT RING ENERGY, INC.

 

Ring Energy, Inc. is a Midland-based exploration and production company that is engaged in oil and natural gas acquisition, exploration, development and production activities. Our exploration and production interests are currently focused in Texas and Kansas. The Company takes a conventional approach to its drilling program and seeks to develop its traditional core areas, as well as look for new growth opportunities.

 

The Company’s primary drilling operations target the Central Basin Platform in Andrews County and Gaines County, Texas. The Company also operates in Kansas, targeting the Mississippi Lime play in Gray, Finney and Haskell counties.

 

Ring believes that there is significant value to be created by drilling undeveloped opportunities on its Texas properties. Ring intends to grow its reserves and production through development, drilling, exploitation and exploration activities on this multi-year project inventory of identified potential drilling locations and through acquisitions that meet the Company’s strategic and financial objectives, targeting oil-weighted reserves.

 

RISK FACTORS

 

An investment in our securities involves risks. We urge you to carefully consider all of the information contained in or incorporated by reference in this prospectus and other information which may be contained or incorporated by reference in any applicable prospectus supplement as provided under “Incorporation of Certain Information by Reference,” including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. This prospectus also contains forward-looking statements that involve risks and uncertainties. Please read “Cautionary Statement Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including the risks described in this prospectus or any applicable prospectus supplement and in the documents incorporated by reference in this prospectus or any applicable prospectus supplement. If any of these risks occur, our business, financial condition or results of operation could be adversely affected.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus and any prospectus supplement contains or incorporates by reference statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this prospectus and any prospectus supplement regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this prospectus or any prospectus supplement, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of the date of this prospectus and any prospectus supplement. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this prospectus and any prospectus supplement are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under “Risk Factors” and elsewhere in this prospectus and any prospectus supplement. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

 

Forward-looking statements speak only as of the date of this prospectus and any prospectus supplement. All such forward-looking statements and any subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section and any other cautionary statements that may accompany such forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements.

 

1
 

 

WHERE YOU CAN FIND MORE INFORMATION

 

We are subject to the information requirements of the Exchange Act and, in accordance therewith, file annual, quarterly and current reports, proxy statements and other information with the SEC. Such reports and other information filed by us can be inspected and copied at the public reference facilities of the SEC at 100 F Street N.E., Washington, D.C. 20549. Requests for copies should be directed to the SEC’s Public Reference Section, Judiciary Plaza, 100 F Street N.E., Washington, D.C. 20549. Please call the SEC at 1–800–SEC–0330 for more information on the public reference rooms.  The SEC maintains a web site (www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically.

 

We have filed with the SEC the Registration Statement of which this prospectus constitutes a part, under the Securities Act.  For further information pertaining to us, reference is made to the Registration Statement.  Statements contained in this prospectus concerning the provisions of documents are necessarily summaries of such documents, and each such statement is qualified in its entirety by reference to the copy of the applicable document filed with the SEC.  Copies of the Registration Statement are on file at the offices of the SEC and may be inspected without charge at the offices of the SEC, the address of which is set forth above, and copies may be obtained from the SEC at prescribed rates.  The Registration Statement has been filed electronically through the SEC’s Electronic Data Gathering, Analysis and Retrieval System and may be obtained through the Commission’s web site (www.sec.gov).

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we have filed with the SEC, which means that we can disclose important information to you without actually including the specific information in this prospectus by referring you to those documents. The information incorporated by reference is an important part of this prospectus and later information that we file with the SEC will automatically update and supersede this information. Therefore, before you decide to invest in a particular offering under this shelf registration, you should always check for reports we may have filed with the SEC after the date of this prospectus. The following documents previously filed with the SEC are incorporated by reference in this prospectus:

 

·Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on
March 20, 2014;

 

·Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2014, June 30, 2014 and September 30, 2014, filed with the SEC on May 8, 2014, August 8, 2014 and November 6, 2014, respectively; and

 

·Current Reports on Form 8-K filed with the SEC on February 7, 2014, March 3, 2014, June 20, 2014, and July 3, 2014.

 

All future documents filed with the SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (other than portions of these documents that are deemed to have been furnished and not filed in accordance with SEC rules, including current reports on Form 8-K furnished under Item 2.02 and Item 7.01) before the termination of the offering under this prospectus and any applicable prospectus supplement shall be deemed to be incorporated in this prospectus by reference and to be a part hereof from the date of filing of such documents.

 

Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus or any applicable prospectus supplement will be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any applicable prospectus supplement.

 

2
 

 

We undertake to provide without charge to any person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon oral or written request of such person, a copy of any or all of the documents that have been incorporated by reference in this prospectus, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit in this prospectus. You should direct requests for documents to us at the following address: Ring Energy, Inc., 6555 S. Lewis Ave., Suite 200, Tulsa, Oklahoma 74136, Attention: William R. Broaddrick, or by telephone number at (918) 499-3880.

 

USE OF PROCEEDS

 

Unless we inform you otherwise in the applicable prospectus supplement, we may use the net proceeds from the sale of the offered securities for various business purposes, including strategic acquisitions, capital expenditures, working capital, the repurchase and redemption of our securities and other general corporate purposes. Pending the application of such proceeds, we may invest the proceeds in short-term marketable securities or money market obligations.

 

The actual application of proceeds from the sale of any particular offering of securities using this prospectus will be described in the applicable prospectus supplement relating to such offering. The precise amount and timing of the application of these proceeds will depend upon our funding requirements and the availability and cost of other funds.

 

RATIO OF EARNINGS TO FIXED CHARGES

AND

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS

 

We have computed the following ratio of earnings to fixed charges for each of the following periods on a consolidated basis. You should read the following ratio in conjunction with our consolidated financial statements and the notes to those financial statements that are incorporated by reference in this prospectus. The ratio of earnings to combined fixed charges and preference dividends for the periods presented is the same as the ratio of earnings to fixed charges since we have no outstanding preferred stock and, therefore, no dividend requirements.

  

   Nine Months Ended                 
   September 30, 2014   Year Ended December 31, 
       2013   2012   2011   2010 
Ratio of Earnings to Fixed Charges (1)(2)   -    -    -    1.76    - 

 

(1) In calculating the ratio of earnings to fixed charges, “earnings” consist of income (loss) from continuing operations before income tax, plus fixed charges (excluding capitalized interest). “Fixed charges” represent interest incurred (whether expensed or capitalized), amortization of debt costs and an estimate of the interest within rental expense.
   
(2) For the years ended December 31, 2013 and 2012, fixed charges exceeded earnings by $0.4 million and $1.8 million, respectively.

 

PLAN OF DISTRIBUTION

 

We may use this prospectus and any accompanying prospectus supplement to sell our securities from time to time as follows:

 

    directly to purchasers;

 

    through agents;

 

    through underwriters;

 

    through dealers; and

 

    through any other method permitted by applicable law.

 

3
 

 

We, or agents designated by us, may directly solicit, from time to time, offers to purchase our securities. Any such agent may be deemed to be an underwriter as that term is defined in the Securities Act. We will name the agents involved in the offer or sale of our securities and describe any commissions payable by us to these agents in the applicable prospectus supplement. Unless otherwise indicated in the applicable prospectus supplement, these agents will be acting on a best efforts basis for the period of their appointment. The agents may be entitled under agreements which may be entered into with us to indemnification by us against specific civil liabilities, including liabilities under the Securities Act. The agents may also be our customers or may engage in transactions with or perform services for us in the ordinary course of business.

 

If we utilize any underwriters in the sale of our securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement with those underwriters at the time of sale to them. We will set forth the names of these underwriters and the terms of the transaction in the applicable prospectus supplement, which will be used by the underwriters to make resales of our securities in respect of which this prospectus is delivered to the public. We may indemnify the underwriters under the relevant underwriting agreement against specific liabilities, including liabilities under the Securities Act. The underwriters may also be our customers or may engage in transactions with or perform services for us in the ordinary course of business.

 

If we utilize a dealer in the sale of our securities in respect of which this prospectus is delivered, we will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. We may indemnify the dealers against specific liabilities, including liabilities under the Securities Act. The dealers may also be our customers or may engage in transactions with, or perform services for us in the ordinary course of business.

 

To the extent that we make sales through one or more underwriters or agents in at-the-market offerings, we will do so pursuant to the terms of a sales agency financing agreement or other at-the-market offering arrangement between us and the underwriters or agents. If we engage in at-the-market sales pursuant to any such agreement, we will issue and sell our securities through one or more underwriters or agents, which may act on an agency basis or on a principal basis. During the term of any such agreement, we may sell securities on a daily basis in exchange transactions or otherwise as we agree with the underwriters or agents. The agreement will provide that any securities sold will be sold at prices related to the then prevailing market prices for our securities. Therefore, exact figures regarding proceeds that will be raised or commissions to be paid cannot be determined at this time. Pursuant to the terms of the agreement, we also may agree to sell, and the relevant underwriters or agents may agree to solicit offers to purchase, blocks of our common stock or other securities. The terms of each such agreement will be set forth in more detail in a prospectus supplement to this prospectus. In the event that any underwriter or agent acts as principal, or broker-dealer acts as underwriter, it may engage in certain transactions that stabilize, maintain or otherwise affect the price of our securities. We will describe any such activities in the prospectus supplement relating to the transaction.

 

The place and time of delivery for our securities in respect of which this prospectus is delivered will be set forth in the applicable prospectus supplement.

 

DESCRIPTION OF CAPITAL STOCK

 

The following is a description of our capital stock and a summary of the rights of our stockholders. This description and summary are not complete, and you should also refer to our Articles of Incorporation and Bylaws, each as amended, which are incorporated by reference in this prospectus, and to Nevada law.

 

We are authorized to issue up to 150,000,000 shares of Common Stock, par value $0.001 per share, and up to 50,000,000 shares of preferred stock, par value $0.001 per share. As of November 14, 2014, there were 25,725,001 shares of our Common Stock issued and outstanding and no shares of preferred stock outstanding. All outstanding shares of Common Stock are fully paid and nonassessable.

 

4
 

 

Common Stock

 

Voting Rights

 

Holders of our Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote, except as matters that relate only to a series of our preferred stock. Holders of Common Stock do not have cumulative voting rights.

 

Each outstanding share of voting capital stock of the Company shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders, except as otherwise provided in the Articles of Incorporation of the Company. Except as otherwise provided by the corporation law of the State of Nevada, the Articles of Incorporation of the Company or the Bylaws of the Company, if a quorum is present: (a) directors shall be elected by a plurality of the votes of the shares of capital stock of the Company present in person or represented by proxy at the meeting and entitled to vote on the election of directors; and (b) action on any matter other than the election of directors shall be approved if the votes cast by the holders of shares represented at the meeting and entitled to vote on the subject matter favoring the action exceed the votes cast opposing such action.

 

Our board of directors is elected annually at the meeting of our stockholders. Each director holds office until the next annual meeting of our stockholders at which his term expires and until his successor is elected and qualified, or until his earlier death, resignation or removal.

 

Any action that the stockholders could take at a meeting may be taken without a meeting if one or more written consents, setting forth the action taken, shall be signed and dated, before or after such action, by the holders of outstanding stock of each voting group entitled to vote thereon having not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. The consent shall be delivered to us for inclusion in the minutes or filing with the corporate records. We will give notice of any action so taken within ten (10) days of the date of such action to those stockholders entitled to vote thereon who did not give their written consent and to those stockholders not entitled to vote thereon.

 

According to the Company’s Articles of Incorporation, the authority to adopt, amend or repeal bylaws is reserved exclusively to the Board of Directors.

 

Liquidation

 

In the event of a liquidation, dissolution or winding up, each outstanding share of Common Stock entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for any class of stock, if any, having preference over the Common Stock.

 

Dividend Rights

 

The board of directors may from time to time declare, and we may pay, dividends on our outstanding shares in the manner and upon the terms and conditions provided by the corporation law of the State of Nevada.

 

We have not declared or paid any cash dividends on our Common Stock during the last three years. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

 

Redemption

 

Our Common Stock is not redeemable.

 

Conversion Rights

 

Our Common Stock is not convertible.

 

5
 

 

Preemptive Rights

 

Holders of our Common Stock do not have preemptive rights.

 

Other Provisions

 

The Common Stock to be offered by any applicable prospectus supplement, has been or will be duly and validly authorized by the Company, and, upon issuance and sale in accordance with the applicable prospectus supplement, will be duly and validly issued, fully paid and non-assessable.

 

Transfer Agent

 

The transfer agent and registrar for our Common Stock is Standard Registrar and Transfer Company. Its address is 12528 South 1840 East, Draper, Utah 84020, and its telephone number is (801) 571-8844.

 

Listing

 

Our Common Stock is listed on the NYSE MKT under the symbol “REI”. Prior to September 1, 2013, our Common Stock was quoted on the OTCQB and the OTC Bulletin Board under the trading symbol “RNGE”.

 

This section is a summary and may not describe every aspect of our Common Stock that may be important to you. We urge you to read applicable Nevada law, our articles of incorporation and bylaws, as amended, because they, and not this description, define your rights as a holder our Common Stock. See “Where You Can Find More Information” for information on how to obtain copies of these documents.

 

Anti-Takeover Provisions of Our Charter Documents and Bylaws

 

Sections 78.378 to 78.3793 of the Nevada Revised Statutes (“NRS”) contain provisions that may prevent any person acquiring a controlling interest in a Nevada company from exercising voting rights. Under NRS Sections 78.378 to 78.3793, an acquiring person who acquires a controlling interest in a company’s common shares may not exercise voting rights on any of these shares unless these voting rights are granted by a majority vote of our disinterested stockholders at a special stockholders' meeting held upon the request and at the expense of the acquiring person. We have expressly opted-out of, or elect not to be governed by, the “Acquisition of Controlling Interest” provisions contained in NRS Sections 78.378 through 78.3793, inclusive, or any successor statutes.

 

Board Vacancies are Generally Filled by Remaining Directors and Not Stockholders

 

Our bylaws provide that any vacancies on the board of directors may be filled by the vote of the majority of the remaining directors, although less than a quorum. Notwithstanding the immediately preceding sentence, the board of directors may by resolution determine that any such vacancies or newly created directorships shall be filled by our stockholders representing at least one-third (1/3) of the issued and outstanding shares of our capital stock that would be entitled to vote at a meeting of stockholders.

 

Stockholder Meetings

 

The bylaws provide that a special meeting of stockholders, other than those required by Nevada law, may be called by or at the request of the Chairman of the Board or the Chief Executive Officer, and shall be called by the Secretary at the written request, or by resolution adopted by, a majority of the Board of Directors or the holders of 10% of the outstanding shares of capital stock entitled to vote at the meeting.

 

Undesignated Preferred Stock

 

The ability to authorize undesignated preferred stock makes it possible for our Board of Directors to designate and issue, without stockholder approval, one or more series of preferred stock with voting or other rights or preferences that could make it more difficult or prevent a change of control of our company or the removal of our management.

 

6
 

 

Requirements for Advance Notification of Stockholder Nominations and Proposals

 

Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors.

 

Preferred Stock

 

The following description of the terms of the preferred stock sets forth the general terms and provisions of the preferred stock to which any prospectus supplement may relate. Other terms of any series of the preferred stock offered by any prospectus supplement will be described in that prospectus supplement. The description of the provisions of the preferred stock set forth below and in any applicable prospectus supplement does not purport to be complete and is subject to and qualified in its entirety by reference to our Articles of Incorporation and the certificate of designation relating to each series of the preferred stock. The certificate of designation will be filed with the SEC and incorporated by reference in the registration statement of which this prospectus is a part at or prior to the time of the issuance of each series of the preferred stock.

 

The preferred stock may be issued from time to time by our board of directors as shares of one or more classes or series. Except as otherwise provided herein or required by law, the Board of Directors is vested with the authority to provide, out of the unissued shares of preferred stock, for one or more classes or series of preferred stock and, with respect to each such class or series, to prescribe the classes, series and the number of each class or series of preferred stock and the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock.

 

The issuance of shares of preferred stock, or the issuance of rights to purchase shares of preferred stock, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holders to block such a transaction; or the issuance might facilitate a business combination by including voting rights that would provide a required percentage vote of the stockholders. In addition, under some circumstances, the issuance of preferred stock could adversely affect the voting power of the holders of the common stock. Although our board of directors is required to make any determination to issue preferred stock based on its judgment as to the best interests of our stockholders, the board of directors could act in a manner that would discourage an acquisition attempt or other transaction that some or a majority of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of the stock. The board of directors does not currently intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or the rules of any market on which our securities are traded.

 

The preferred stock shall have the dividend, liquidation, redemption and voting rights set forth in a prospectus supplement relating to a particular series of the preferred stock. Reference is made to the prospectus supplement relating to the particular series of the preferred stock offered by the prospectus supplement for specific terms, including:

 

    the designation and stated value per share of such preferred stock and the number of shares offered;

 

    the amount of liquidation preference per share;

 

    the initial public offering price at which the preferred stock will be issued;

 

    the dividend rate or method of calculation, the dates on which dividends shall be payable, the form of dividend payment and the dates from which dividends shall begin to cumulate, if any;

 

    any redemption or sinking fund provisions;

 

    any conversion or exchange rights; and

 

    any additional voting, dividend, liquidation, redemption, sinking fund and other rights, preferences, privileges, limitations and restrictions.

 

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The preferred stock will, when issued, be fully paid and nonassessable. The rights of the holders of each series of the preferred stock will be subordinate to the rights of our general creditors. Any preferred stock that is issued will have priority over the Common Stock as to dividend or liquidation rights or both.

 

The transfer agent for each series of preferred stock will be identified in the relevant prospectus supplement.

 

DESCRIPTION OF DEBT SECURITIES

 

The following description sets forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. Other terms, and the particular terms of a specific series of debt securities (which differ from the terms described below), will be described in the prospectus supplement relating to that series. The debt securities will be senior debt securities or subordinated debt securities. The senior debt securities will be issued under an indenture (the “Senior Indenture”), to be entered into between us and a trustee named in the applicable prospectus supplement, as trustee (the “Senior Trustee”), and the subordinated debt securities will be issued under a separate indenture (the “Subordinated Indenture”) to be entered into between us and a trustee to be named in the applicable prospectus supplement, as trustee (the “Subordinated Trustee”). The term “Trustee” used in this prospectus shall refer to the Senior Trustee or the Subordinated Trustee, as appropriate. The Senior Indenture and the Subordinated Indenture are sometimes collectively referred to herein as the “Indentures” and individually as “Indenture.” The Indentures are subject to and governed by the Trust Indenture Act of 1939, as amended (the “TIA”), and may be supplemented from time to time following execution.

 

The terms of the debt securities include those stated in the applicable Indenture and those made part of the Indenture by reference to the TIA. The debt securities are subject to all of those terms, and holders of debt securities are referred to the applicable Indenture and the TIA for a statement of those terms.

 

The statements set forth below in this section are brief summaries of certain provisions contained in the Indentures, do not purport to be complete, and are subject to, and are qualified in their entirety by reference to, the Indentures, including the definitions of certain terms therein, and the TIA. Capitalized terms used in this section and not otherwise defined in this section will have the respective meanings assigned to them in the Indentures.

 

General

 

The debt securities will be our direct, unsecured obligations. The indebtedness represented by the senior debt securities will rank equally with all of our other unsecured and unsubordinated indebtedness. The indebtedness represented by the subordinated debt securities will be subordinated in right of payment to the prior payment in full of all of our senior debt as described below under “Subordination.”

 

A prospectus supplement, the applicable Indenture and the supplemental indenture, if any, relating to any series of debt securities being offered will include specific terms relating to the offering. These terms will include some or all of the following:

 

    the form and title of the debt securities and whether the debt securities are senior debt securities or subordinated debt securities;

 

    the aggregate principal amount of the debt securities and any limit on the aggregate principal amount;

 

    the date or dates on which the principal of the debt securities shall be payable;

 

    the rate or rates (fixed or variable) at which the debt securities shall bear interest, if any, and the date or dates from which the interest shall accrue;

 

    the dates on which interest, if any, shall be payable and the record dates for the interest payment dates;

 

    the place or places where the principal of and interest, if any, on the debt securities of the series will be payable;

 

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    any optional or mandatory redemption or any sinking fund or analogous provisions;

 

    any special tax implications of the debt securities, including provisions for original issue discount securities, if offered;

 

    any provisions granting special rights to holders when a specified event occurs;

 

    the percentage of the principal amount at which the debt securities will be issued and any payments due if the maturity of the debt securities is accelerated;

 

    any events of default with respect to the debt securities that differ from those set forth in the applicable Indenture;

 

    provisions regarding the convertibility or exchangeability of the debt securities;

 

    provisions pertaining to the issuance of debt securities in the form of global debt securities, as described below;

 

    provisions relating to the modification of the terms of the debt securities or the rights of security holders;

 

    the form of and conditions to issuance of debt securities issuable in definitive form, other than as described below;

 

    the identity of the trustee, the registrar for the debt securities and any paying agent; and

 

    any other terms not inconsistent with the provisions of the applicable Indenture.

 

The debt securities of a series may be issued in registered, coupon or global form and will be denominated in an amount equal to all or a portion of the aggregate principal amount of those debt securities. See “Global Debt Securities.”

 

Denominations

 

Unless otherwise indicated in any applicable prospectus supplement, the debt securities of any series will be issued only in fully registered form in a denomination equal to $2,000 or an integral multiple of $1,000 in excess thereof.

 

Global Debt Securities

 

Certain series of the debt securities may be issued as permanent global debt securities to be deposited with a depositary with respect to that series. Unless otherwise indicated in the applicable prospectus supplement, the following is a summary of the depository arrangements applicable to debt securities issued in permanent global form and for which The Depository Trust Company, or DTC, acts as depositary.

 

Each global debt security will be deposited with, or on behalf of, DTC, as depositary, or its nominee and registered in the name of a nominee of DTC. Except under the limited circumstances described below, global debt securities are not exchangeable for definitive certificated debt securities.

 

Ownership of beneficial interests in a global debt security is limited to institutions that have accounts with DTC or its nominee (“participants”) or persons that may hold interests through participants. In addition, ownership of beneficial interests by participants in a global debt security will be evidenced only by, and the transfer of that ownership interest will be effected only through, records maintained by DTC or its nominee for a global debt security. Ownership of beneficial interests in a global debt security by persons that hold through participants will be evidenced only by, and the transfer of that ownership interest within that participant will be effected only through, records maintained by that participant. DTC has no knowledge of the actual beneficial owners of the debt securities. Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the participants through which the beneficial owners entered the transaction. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in a global debt security.

 

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Payment of principal of, and interest on, debt securities represented by a global debt security registered in the name of or held by DTC or its nominee will be made to DTC or its nominee, as the case may be, as the registered owner and holder of the global debt security representing the debt securities. We expect that upon receipt of any payment of principal of, or interest on, a global debt security, DTC will immediately credit accounts of participants on its book-entry registration and transfer system with payments in amounts proportionate to their respective beneficial interests in the principal amount of that global debt security as shown in the records of DTC. Payments by participants to owners of beneficial interests in a global debt security held through those participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the sole responsibility of those participants, subject to any statutory or regulatory requirements that may be in effect from time to time.

 

Neither we, any trustee nor any of our respective agents will be responsible for any aspect of the records of DTC, any nominee or any participant relating to, or payments made on account of, beneficial interests in a permanent global debt security or for maintaining, supervising or reviewing any of the records of DTC, any nominee or any participant relating to such beneficial interests.

 

A global debt security is exchangeable for definitive debt securities registered in the name of, and a transfer of a global debt security may be registered to, any person other than DTC or its nominee, only if:

 

    DTC notifies us that it is unwilling or unable to continue as depositary for that global debt security or at any time DTC ceases to be registered under the Exchange Act;

 

    we determine in our discretion that the global debt security shall be exchangeable for definitive debt securities in registered form; or

 

    there shall have occurred and be continuing an event of default or an event which, with notice or the lapse of time or both, would constitute an event of default under the debt securities.

 

 

Any global debt security that is exchangeable pursuant to the preceding sentence will be exchangeable in whole for definitive debt securities in registered form, of like tenor and of an equal aggregate principal amount as the global debt security, in a denomination equal to $2,000 or an integral multiple of $1,000 in excess thereof. The definitive debt securities will be registered by the registrar in the name or names instructed by DTC. We expect that these instructions may be based upon directions received by DTC from its participants with respect to ownership of beneficial interests in the global debt security.

 

Except as provided above, owners of the beneficial interests in a global debt security will not be entitled to receive physical delivery of debt securities in definitive form and will not be considered the holders of debt securities for any purpose under the indentures. No global debt security shall be exchangeable except for another global debt security of like denomination and tenor to be registered in the name of DTC or its nominee.

 

Accordingly, each person owning a beneficial interest in a global debt security must rely on the procedures of DTC and, if that person is not a participant, on the procedures of the participant through which that person owns its interest, to exercise any rights of a holder under the global debt security or the Indentures.

 

We understand that, under existing industry practices, in the event that we request any action of holders, or an owner of a beneficial interest in a global debt security desires to give or take any action that a holder is entitled to give or take under the debt securities or the indentures, DTC would authorize the participants holding the relevant beneficial interest to give or take that action, and those participants would authorize beneficial owners owning through those participants to give or take that action or would otherwise act upon the instructions of beneficial owners owning through them.

 

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DTC is a limited purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered under the Exchange Act. DTC was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in those securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC’s participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to DTC’s book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC.

 

Payment and Transfer

 

Unless otherwise indicated in the applicable prospectus supplement, principal of, and interest and any premium on, our fully registered debt securities will be paid at designated places. Payment will be made by check and mailed to the persons in whose names our debt securities are registered on days specified in the applicable indenture or any prospectus supplement. Debt securities payments in other forms will be paid at a place designated by us and specified in a prospectus supplement.

 

Fully registered securities may be transferred or exchanged at the corporation trust office of the applicable Trustee or at any other office or agency maintained by us for such purposes, without the payment of any service charge except for any tax or governmental charge.

 

Covenants

 

Under the Indentures, we will agree to:

 

    pay the principal of, and interest and any premium on, the debt securities when due;

 

    maintain a place of payment;

 

    deliver an officer’s certificate to the Trustee within 150 days after the end of each fiscal year reviewing our obligations under the Indentures; and

 

    deposit sufficient funds with any paying agent on or before the due date for any payment of principal, interest or premium.

  

Events of Default

 

Unless otherwise specified in the applicable prospectus supplement, each of the following events will be an event of default under an Indenture with respect to any series of debt securities issued under that Indenture:

 

    failure to pay principal of (or premium, if any, on) any debt security of the series when due;

 

    failure to deposit a sinking fund or any other such analogous required payment, if any, when due by the terms of a debt security of the series;

 

    failure to pay any interest on any debt security of the series when due, continued for 30 days;

 

    failure to perform or comply with any covenant in the applicable Indenture or related supplemental indenture, continued for 90 days after written notice as provided in the Indenture;

 

    certain events in bankruptcy, insolvency or reorganization affecting us; and

 

    any other event of default set forth in the applicable indenture or supplemental indenture relating to the debt securities of that series.

 

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An event of default for a particular series of debt securities does not necessarily constitute an event of default for any other series of debt securities issued under an Indenture. The applicable Trustee may withhold notice to the holders of a series of debt securities of any default, except payment defaults on those debt securities, if it considers such withholding to be in the interest of the holders.

 

If an event of default occurs and is continuing, then the applicable Trustee or the holders of a specified percentage in aggregate principal amount of the outstanding debt securities of that series may declare the entire principal amount of the debt securities of that series to be due and payable immediately; provided, however, that the holders of a majority of the aggregate principal amount of the debt securities of that series may, under certain circumstances, rescind and annul the declaration.

 

Subject to provisions in each Indenture relating to its duties in case an event of default shall have occurred and be continuing, no Trustee will be under an obligation to exercise any of its rights or powers under that Indenture at the request, order or direction of any holders of debt securities then outstanding under that Indenture, unless the holders shall have offered to the applicable Trustee reasonable indemnity. If such reasonable indemnity is provided, the holders of a majority in aggregate principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable Trustee or exercising any power conferred on the Trustee, for any series of debt securities.

 

Defeasance

 

When we use the term “defeasance,” we mean a discharge from some or all of our obligations under the applicable Indenture. We may choose to either discharge our obligations on the debt securities of any series in a legal defeasance, or to be released from covenant restrictions on the debt securities of any series in a covenant defeasance. We may do so at any time on the 91st day after we irrevocably deposit with the applicable trustee sufficient cash or government securities to pay the principal, interest, any premium and any other amounts due on the stated maturity date or a redemption date of the debt securities of the series. If we choose the legal defeasance option, the holders of the debt securities of the series will not be entitled to the benefits of the applicable Indenture, except for certain obligations, including obligations to register the transfer or exchange of debt securities, to replace lost, stolen or mutilated debt securities, maintain a place of payment and certain other obligations set forth in the Indenture.

 

We may discharge our obligations under the Indentures or be released from covenant restrictions only if we meet certain requirements. Among other things, we must deliver to the Trustee an opinion of our legal counsel to the effect that holders of the series of debt securities will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. In the case of legal defeasance only, this opinion must be based on either a ruling received from or published by the Internal Revenue Service or a change in United States federal income tax law since the date of the Indenture. We may not have a default on the debt securities discharged existing on the date of deposit.

 

Subordination

 

Debt securities of a series may be subordinated to our “Senior Indebtedness,” which we define generally as money borrowed, including guarantees, by us that is not expressly subordinate or junior in right of payment to any of our other indebtedness. Subordinated debt securities will be subordinate in right of payment, to the extent and in the manner set forth in the indenture, and related supplemental indenture, and the prospectus supplement relating to such series, to the prior payment of all of our indebtedness that is designated as “Senior Indebtedness” with respect to the series. Under a subordinated indenture, payment of the principal, interest and premium, if any, on the subordinated debt securities will generally be subordinated and junior in right of payment to the prior payment in full of all senior debt. The Subordinated Indenture will provide that no payment of principal, interest and any premium on the subordinated debt securities may be made in the event:

 

    we fail to pay the principal, interest, premium, if any, or any other amounts on any Senior Indebtedness when due; or

 

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    any other default on Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the default has been cured or waived and any such acceleration has been rescinded or such Senior Indebtedness has been paid in full in cash.

 

The Subordinated Indenture will not limit the amount of Senior Indebtedness that we may incur.

 

No Individual Liability of Directors, Officers, Employees or Stockholders

 

No director, officer, employee or stockholder, as such, of ours or any of our affiliates shall have any personal liability in respect of our obligations under any Indenture or the debt securities by reason of his, her or its status as such.

 

DESCRIPTION OF WARRANTS

 

We may issue warrants to purchase our debt securities, common stock or preferred stock. Warrants may be issued independently or together with any other securities and may be attached to, or separate from, such securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. In addition to this summary, you should refer to the warrant agreement, including the forms of warrant certificate representing the warrants, relating to the specific warrants being offered for the complete terms of the warrant agreement and the warrants. That warrant agreement, together with the terms of warrant certificate and warrants, will be filed with the SEC in connection with the offering of the specific warrants.

 

The applicable prospectus supplement will describe the terms of any series of warrants in respect of which this prospectus is being delivered, including, where applicable, the following:

 

    the title of such warrants;

 

    the aggregate number of such warrants;

 

    the price or prices at which such warrants will be issued;

 

    the currency or currencies, in which the price of such warrants will be payable;

 

    the securities or other rights, including rights to receive payment in cash or securities based on the value, rate or price of one or more specified commodities, currencies, securities or indices, or any combination of the foregoing, purchasable upon exercise of such warrants;

 

    the price at which and the currency or currencies in which the securities or other rights purchasable upon exercise of such warrants may be purchased;

 

    the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;

 

    the minimum or maximum amount of such warrants which may be exercised at any one time;

 

    the anti-dilution provisions of such warrants;

 

    the redemption or call provisions of such warrants;

 

    provisions regarding changes to or adjustments in the exercise price;

 

    the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;

 

    the date on and after which such warrants and the related securities will be separately transferable;

 

    information with respect to book-entry procedures, if any;

 

    a discussion of any material United States federal income tax considerations; and

 

    any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.

 

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Until they exercise their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon exercise, and will not be entitled to:

 

    receive payments of principal of (or premium, if any, on) or interest, if any, on any debt securities purchasable upon exercise;

 

    receive dividend payments, if any, with respect to any underlying securities; or

 

    exercise the voting rights of any common stock or preferred stock purchasable upon exercise.
       

 

DESCRIPTION OF UNITS

 

As specified in the applicable prospectus supplement, we may issue units consisting of one or more of the following: debt securities, shares of common stock or preferred stock, warrants or any combination of such securities.

 

The applicable prospectus supplement will describe:

 

    the terms of the units and of any of our debt securities, common stock, preferred stock or warrants comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately;

 

    a description of the terms of any unit agreement governing the units;

 

    a description of the provisions for the payment, settlement, transfer or exchange of the units; and

 

    if applicable, a discussion of any material United States federal income tax considerations.

 

LEGAL MATTERS

 

In connection with particular offerings of our securities in the future, and if stated in the applicable prospectus supplement, the validity of those securities may be passed upon for us by Burleson LLP and for any underwriters or agents by counsel named in the applicable prospectus supplement.

 

EXPERTS

Independent Accountants

 

Eide Bailly LLP, our independent registered public accounting firm, has audited our balance sheet as of December 31, 2013, and the related consolidated statements of operations, statements of stockholders’ equity and cash flows for the year then ended. We have incorporated by reference our financial statements in this prospectus and elsewhere in the registration statement of which this prospectus is a part in reliance on Eide Bailly LLP’s report, given on their authority as experts in accounting and auditing.

 

Hansen, Barnett & Maxwell, P.C., an independent registered public accounting firm, has audited our balance sheet as of December 31, 2012, and the related consolidated statements of operations, statements of stockholders’ equity and cash flows for the year then ended. We have incorporated by reference our financial statements in this prospectus and elsewhere in the registration statement of which this prospectus is a part in reliance on Hansen, Barnett & Maxwell, P.C.’s report, given on their authority as experts in accounting and auditing.

 

Petroleum Engineers

 

The information regarding estimated quantities of oil and natural gas reserves and the discounted present value of future pre-tax cash flows therefrom is based upon estimates of such reserves and present values prepared by or derived from estimates included in this prospectus, prepared by independent third party engineers and audited by Cawley, Gillespie & Associates, Inc., independent petroleum engineers. The information incorporated by reference into this prospectus, including the estimated quantities of oil and natural gas reserves and the discounted present value of future pre-tax cash flows therefrom, is based upon estimates of such reserves and present values as of December 31, 2013, prepared by or derived from the “Evaluation Summary” dated March 7, 2014, prepared by Cawley, Gillespie & Associates, Inc. All such information incorporated by reference herein has been included in reliance on the authority of said firm as experts in petroleum engineering.

 

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4,500,000 Shares

 

 

Common Stock 

 

PROSPECTUS

  

Sole Book-Running Manager

 

SunTrust Robinson Humphrey

 

Senior Co-Managers

 

Seaport Global Securities        Euro Pacific Capital

 

 

Co-Managers

 

IBERIA Capital Partners L.L.C.      
  Northland Capital Markets    
    Roth Capital Partners  
      Ladenburg Thalmann

  

 

 

June 18, 2015