Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS

v3.6.0.2
ACQUISITIONS
 12 Months Ended
Dec. 31, 2016
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
NOTE 3 – ACQUISITIONS
 
In June 2015, Ring completed the acquisition of oil and gas assets and properties in the Ford West Field and Ford Geraldine Unit in Reeves and Culberson Counties, Texas. The acquired properties consist of 19,983 gross (19,679 net) acres and include a 98% average working interest and a 79% average net revenue interest. Consideration given by the Company consisted of cash payments totaling $75,000,000 and the assumption of accounts receivable of approximately $286,563 and accounts payable of approximately $742,332. The Company incurred approximately $129,896 in acquisition related costs, which were recognized in general and administrative expense during the year ended December 31, 2015.
 
The acquisition was recognized as a business combination whereby Ring recorded the assets acquired and the liabilities assumed at their fair values as of May 1, 2015, which is the date the Company obtained control of the properties and was the acquisition date for financial reporting purposes. The estimated fair value of the acquired properties approximated the consideration paid, which the Company concluded approximated the fair value that would be paid by a typical market participant. The following table summarizes the fair values of the assets acquired and the liabilities assumed:
 
Assets acquired
 
 
 
Proved oil and natural gas properties
 
$
78,361,634
 
Accounts receivable
 
 
400,629
 
Liabilities assumed
 
 
 
 
Accounts payable
 
 
(1,562,147)
 
Asset retirement obligations
 
 
(3,361,634)
 
Total Identifiable Net Assets
 
$
73,838,482
 
 
The following unaudited pro forma information is presented to reflect the operations of the Company as if the Ford West Field and Ford Geraldine Unit acquisition had been completed on January 1, 2015 and 2014, respectively.
 
For the years ended December 31,
 
2015
 
2014
 
 
 
 
 
 
 
Oil and Gas Revenues
 
$
37,253,437
 
$
74,303,242
 
Net Income (Loss)
 
$
(9,097,288)
 
$
18,186,433
 
 
 
 
 
 
 
 
 
Basic Earnings (Loss) per Share
 
$
(0.32)
 
$
0.34
 
Diluted Earnings (Loss) per Share
 
$
(0.32)
 
$
0.33