ACQUISITIONS AND DIVESTITURES |
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| Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACQUISITIONS AND DIVESTITURES |
NOTE 5 — ACQUISITIONS AND DIVESTITURES
CBP Vertical Well Sale
On September 30, 2024, the Company completed the sale of certain oil and gas properties, including vertical wells and associated facilities, within Andrews County, Texas and Gaines County, Texas to an unaffiliated party for $5.5 million, with cash consideration being the same. As part of the sale, the buyer assumed an asset retirement obligation balance of approximately $2.7 million.
Lime Rock Acquisition
On February 25, 2025, the Company, as buyer, and Lime Rock Resources IV-A, L.P. (“LRRA”) and Lime Rock Resources IV-C, L.P. ("LRRC" and with LRRA, "Lime Rock"), as seller, entered into a purchase and sale agreement (the “Purchase Agreement”). Pursuant to the closing of the Purchase Agreement, on March 31, 2025 the Company acquired (the “Lime Rock Acquisition”) interests in oil and gas leases and related property of Lime Rock located in the Central Basin Platform of the Texas Permian Basin in Andrews County, Texas, for a purchase price (the “Purchase Price”) of (i) a cash deposit of $5.0 million paid on February 26, 2025 into a third-party escrow account as a deposit pursuant to the Purchase Agreement, (ii) approximately $63.6 million in cash paid on the closing date, net of approximately $12.7 million of preliminary and customary purchase price adjustments and subject to final post-closing settlement between the Company and Lime Rock with an effective date of October 1, 2024, (iii) an aggregate of 6,452,879 shares of common stock and (iv) a deferred cash payment of $10.0 million to be paid by December 31, 2025.
The Lime Rock Acquisition was accounted for as an asset acquisition in accordance with ASC 805. The fair value of the consideration paid by Ring and allocation to the underlying assets acquired, on a relative fair value basis, was recorded as of the date of the closing of the Lime Rock Acquisition. Additionally, costs directly related to the Lime Rock Acquisition were capitalized as a component of the purchase price. Determining the fair value of the assets and liabilities acquired required judgment and certain assumptions to be made, the most significant of these being related to the valuation of Lime Rock's oil and gas properties. The inputs and assumptions related to the oil and gas properties were categorized as level 3 in the fair value hierarchy.
The following table represents the preliminary allocation of the total cost of the Lime Rock Acquisition to the assets acquired and liabilities assumed as of the Lime Rock Acquisition date:
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