10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

  X  .

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  June 30, 2012

 .

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934

Commission File Number: 000-53920

RING ENERGY, INC.

(Exact Name of registrant as specified  in its charter)

Nevada	98-0406406
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

6555 South Lewis Street, Tulsa, OK	74136
(Address of principal executive offices)	(Zip Code)

(918) 499-3880

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  X  . No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  X  . No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer .

Accelerated filer .

Non-accelerated filer  .

Smaller reporting company  X  .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Exchange Act).

Yes . No  X  .

The registrant has one class of common stock of which 10,711,220 shares were outstanding at August 13, 2012.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Quarterly Report of Ring Energy, Inc. on Form 10-Q for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 14, 2012 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T.  Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).  As permitted by Rule 405(a)(2)(ii) of Regulation S-T, Exhibit 101 is required to be furnished by amendment within 30 days of the original filing date of the Form 10-Q.

No other changes have been made to the Form 10-Q.  This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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PART II.  OTHER INFORMATION

Item 6. Exhibits

The Exhibits filed as part of this amended report are listed on the Exhibit Index immediately following the signature page hereto, which Exhibit Index is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Ring Energy, Inc.

Date: September 13,2012

By /s/ William R. Broaddrick                                         

      William R. Broaddrick, CEO & CFO

      (Principal Executive & Financial Officer)

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EXHIBIT INDEX

Exhibit No.

Description

10.1

Ring Energy, Inc. Long-Term Incentive Plan(1)

10.2

Form of Option Grant for Long-Term Incentive Plan(1)

10.3

Revolver Loan Agreement with the F&M Bank &Trust Company Dated May 12, 2011(1)

10.4

First Amendment dated May 12, 2012, to Revolver Loan Agreement with F&M Bank & Trust Company(1)

31.1

Rule 13a-14(a) Certification(1)

32.1

Section 1350 Certification(1)

101.

INS

XBRL Instance Document

101.

SCH

XBRL Taxonomy Extension Schema Document

101.

CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.

DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.

LAB

XBRL Taxonomy Extension Label Linkbase Document

101.

PRE

XBRL Taxonomy Extension Presentation Linkbase Document

___________________

(1) These exhibits were previously included in the Quarterly Report of Ring Energy, Inc. on Form 10-Q for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 14, 2012.

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Asset Retirment Obligation (Details) (Changes in the asset retirement obligation, USD $)	6 Months Ended
	Jun. 30, 2012
Changes in the asset retirement obligation
Balance,,	$ 274,788
Accretion expense"	9,524
Balance,,	$ 284,312

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Subsequent Events (Details) (USD $)	Jun. 30, 2012
Common stock shares sold	63,520
Proceeds from sale of common stock	$ 268,812.50
Common stock private placement per share	$ 4.25
Common stock shares sold.	627,892
Proceeds from sale of common stock.	$ 2,825,497
Common stock private placement per share.	$ 4.50

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Put Options (Details) (USD $)	Jun. 30, 2012
Options granted	80,000
Repurchase price share of Ring	$ 5.00
Fair value of liablility	$ 277,760
Remaining fair value of liablility	$ 183,328
Risk free interest rate,	0.16
Expected life (years)	0.42
Dividend yields	0
Volatilitys	158

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Acquisitions Aseets Acquired And Liabilities Assumed (Details) (USD $)	Aug. 07, 2011
Assets Acquired
Accounts receivable,	$ 52,278
Proved developed and undeveloped oil and gas properties,	1,810,662
Liabilities Assumed
Accounts payable,	(32,181)
Asset retirement obligation,	(39,594)
Total Identifiable Net Assets,	$ 1,791,165

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Basis Of Presentation And Significant Accounting Policies Stanford Cash Flows (Details) (USD $)	3 Months Ended
	Apr. 30, 2011
Cash Flows from Investing Activities,
Payments to purchase oil and gas properties,	$ (176,000)
Cash Flows From Financing Activities,
Capital contributions from shareholders,	206,000
Net Increase in Cash,	30,000
Cash at Beginning of Period,	0
Cash at End of Period,	$ 30,000

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Employee Stock Options Compensation Weighted Average Assumptions (Details)	8 Months Ended
	Dec. 31, 2011
Risk free interest rate.	97
Expected life.	6.5
Dividend yield.	0
Volatility.	0.32

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Acquisitions Pro Forma Results From Operations (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Oil and Natural Gas Revenues	$ 342,522	$ 259,972	$ 670,525	$ 557,756
Net Income (Loss)"	$ (544,657)	$ 1,603	$ (1,253,916)	$ 23,158

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Fair Value Measurements (Details) (USD $)	Jun. 30, 2012
Fair value of non financial liabilities	$ 183,328

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REVOLVING LINE OF CREDIT

6 Months Ended

Jun. 30, 2012

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT

NOTE 4 – REVOLVING LINE OF CREDIT

In May 2011, the Company entered into a credit agreement with a bank that provides for a revolving line of credit of up to $10 million for borrowings and letters of credit. As of June 30, 2012, $4,950,000 was available to be drawn on the line of credit.  The agreement includes a non-usage commitment fee of 0.20% per annum and covenants limiting other indebtedness, liens, transfer or sale of assets, distributions or dividends and merger or consolidation activity.  The facility has an interest rate of the bank’s prime rate plus 0.75% with the total interest rate to be charged being no less than 4.00%.  As of June 30, 2012 the interest rate being charged was 4.00%. The note matured on May 10, 2012 and was extended to May 10, 2013. Two of the Company’s stockholders are jointly and severally obligated for outstanding borrowings under the credit facility.

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Employee Stock Options Fair Value (Details) (USD $)	Dec. 31, 2011
Stock Options price per share	$ 2.32
Share based compensation expeses	$ 95,897
Unrecognized compensation costs	$ 2,463,620
Stock Options weighted average period	2.9
Aggregate market intrinsic value	$ 4.00

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Basis Of Presentation And Significant Accounting Policies Office Equipment (Details)	Jun. 30, 2012
Office Equipment Minimum Useful live	5
Office Equipment Maximum Useful live	7

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Basis Of Presentation And Significant Accounting Policies Oil and Gas Properties (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Amortization expenses	$ 94,707	$ 175,835
Depletion at the rate of 19.87 per barrel	2,351	4,435
Depreciation	$ 10,850	$ 21,001

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Employee Stock Options Unrecognized Compensation Costs (Details) (USD $)	Jun. 30, 2012
Unrecognized compensatin cost related stock options	$ 1,440,189
Stock options weighted average period,	2.96
Intrinsic value of stock options	$ 2,632,500
Common stock closing price	$ 5.12

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Earnings Loss Per Share Information (Details) (USD $)	1 Months Ended	2 Months Ended	3 Months Ended	4 Months Ended	6 Months Ended
	Apr. 30, 2011	Jun. 30, 2011	Jun. 30, 2012	Apr. 30, 2011	Jun. 30, 2012
Net Income Loss	$ 10,690	$ (25,235)	$ (541,377)	$ 8,322	$ (1,171,651)
Basic Weighted-Average Shares Outstanding	6,250,000	6,250,000	3,584,611	6,250,000	3,512,306
Stock options	0	0	0	0	0
Diluted Weighted Average Shares Outstanding	6,250,000	6,250,000	3,584,611	6,250,000	3,512,306
Basic Earnings Loss per Share	$ 0.00	$ 0.00	$ (0.15)	$ 0.00	$ (0.33)
Diluted Earnings Loss per Share	$ 0.00	$ 0.00	$ (0.15)	$ 0.00	$ (0.33)
Stock options to purchase common stock shares	0	0	0	0	1,125,000

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Acquisitions Fisher I Property (Details) (USD $)	May 23, 2011
Percentage of property acquired by Fisher I Property of the working interest (75% net revenue)	100
Percentage of four producing leases of working interest (74.7% net revenue interest)	99.6
Area of undeveloped acres	960
Total cosideration by Fisher I Property	$ 2,296,228
Cash consideration	2,183,306
Shares transferred	20,000
Common stock par value,	$ 2.00
Common stock valued	40,000
The issuance of a put option relating to the Ring shares valued	72,922
Common stock price per share,	$ 5.00
Risk free interest rate	0.11
Dividend yield	0
Expected life	0.5
Volatility	207
Proved developed and undeveloped oil and gas properties	2,358,483
Asset retirement obligation	(62,255)
Total Identifiable Net Assets	$ 2,296,228

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ACQUISITIONS

6 Months Ended

Jun. 30, 2012

ACQUISITIONS

ACQUISITIONS

NOTE 3 – ACQUISITIONS

Fisher I Property – On May 23, 2011, Stanford purchased proved developed and undeveloped oil and natural gas reserves (the “Fisher I Property”) located in the Permian Basin, Andrews County, Texas. The Fisher I Property acquired consisted of 100% of the working interest (75% net revenue interest) in four producing leases, a 99.6% working interest (74.7% net revenue interest) in 640 undeveloped acres and a 92.0% working interest (69.0% net revenue interest) in 960 undeveloped acres. The Fisher I Property was acquired for $2,296,228 of total consideration consisting of cash of $2,183,306, the transfer of 20,000 shares of Ring Energy, Inc. (“Ring”) common stock, valued at $2.00 per share or $40,000, and the issuance of a put option relating to the Ring shares valued at $72,922, whereby the holders could put the Ring shares back to Stanford for $5.00 per share through November 24, 2011.

For purposes of acquisition accounting, the fair value of the Ring shares transferred was determined based on the price stockholders of the Company paid to purchase the shares in May 2011 (see Note 11) since there was not an active market for the Ring shares. The value of the put option was determined using the Black-Scholes option pricing model based on the following assumptions: risk-free interest rate of 0.11%; expected life of 0.5 years; dividend yield of 0% and volatility of 207%, which was calculated on Ring stock historical prices. Stanford incurred $30,673 of acquisition-related costs, which were recognized in general and administrative expense for the eight months ended December 31, 2011.

The acquisition qualified as a business combination and as such, Stanford recognized the assets acquired and the liabilities assumed at their fair values as of the May 23, 2011 acquisition date, which is the date the Company obtained control of the properties. Oil and natural gas sales receivable and production costs payable at May 23, 2011 were not material. The estimated fair value of these properties approximated the consideration paid, which the Company concluded approximated the fair value that would be paid by a typical market participant. As a result, neither goodwill nor a bargain purchase gain was recognized related to the acquisition. The following table summarizes the assets acquired and the liabilities assumed:

Proved developed and undeveloped oil and gas properties	$	2,358,483
Asset retirement obligation		(62,255)
Total Identifiable Net Assets	$	2,296,228

Oil and natural gas sales and income from operations before general and administrative expense from the Fisher I Property, for the eight months ended December 31, 2011, were $166,250 and $49,116, respectively.

Miocene Property – On August 17, 2011, Stanford purchased additional proved developed and undeveloped oil and natural gas reserves (the “Miocene Property”) located in the Permian Basin, Andrews County, Texas. The Miocene Property consisted of 100% of the working interest (75% to 77% net revenue interest) in three producing leases. The Miocene Property was acquired for cash totaling $1,791,165. The Company incurred $98,984 of acquisition-related costs, which were recognized in general and administrative expense during the eight months ended December 31, 2011.

The acquisition was recognized as a business combination whereby Stanford recorded the assets acquired and the liabilities assumed at their fair values as of August 17, 2011, 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 Miocene Property 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
Accounts receivable	$	52,278
Proved developed and undeveloped oil and gas properties		1,810,662
Liabilities Assumed
Accounts payable		(32,181)
Asset retirement obligation		(39,594)
Total Identifiable Net Assets	$	1,791,165

Oil and natural gas sales and income from operations before general and administrative expense from the Miocene Property, for the eight months ended December 31, 2011, were $217,959 and $60,313, respectively.

Fisher II Property – On December 1, 2011, the Company purchased proved developed and undeveloped oil and natural gas reserves (the “Fisher II Property”) located in the Permian Basin, Andrews County, Texas. The Fisher II Property acquired consisted of 100% of the working interest (75% net revenue interest) in one lease.  The Fisher II Property was acquired for $1,747,760 of total consideration consisting of cash of $1,150,000, the transfer of 80,000 shares of Ring common stock, valued at $4.00 per share or $320,000, and the issuance of a put option relating to the Ring shares valued at $277,760, whereby the holder can put the Ring shares back to Stanford at $5.00 per share through December 1, 2012.

Due to the lack of an active market for the Ring shares, the fair value of the Ring shares transferred was determined based on the price at which Ring shares were being sold in a private placement active during the time period that this acquisition occurred. The value of the put option was determined using the Black-Scholes option pricing model based on the following assumptions: risk-free interest rate of 0.11%; expected life of 1.0 years; dividend yield of 0% and volatility of 198%, which was calculated on Ring stock historical prices. The Company incurred $6,898 of acquisition-related costs, which were recognized as general and administrative expense during the eight months ended December 31, 2011.

The acquisition of the Fisher II Property was recognized as a business combination. Stanford recorded the assets acquired and the liabilities assumed at their fair values. The estimated fair value of the Fisher II Property 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:

Proved developed and undeveloped oil and gas properties	$	1,915,152
Asset retirement obligation		(167,392)
Total Identifiable Net Assets	$	1,747,760

Oil and natural gas sales and loss from operations before general and administrative expense from the Fisher II Property for the eight months ended December 31, 2011, were $4,465 and $(7,416), respectively.

Ring Energy, Inc. – On June 28, 2012, Ring Energy, Inc. (“Ring”) completed the acquisition of Stanford Energy, Inc. through the closing of a stock-for-stock exchange agreement dated May 3, 2012.  As a result, Stanford became a wholly-owned subsidiary of Ring. As further described in Note 1, Stanford was determined to be the accounting acquirer. The acquisition of Ring was recognized by Stanford as the issuance of the 6,110,408 common shares of Ring that remained outstanding. The fair value of Ring’s net assets was more clearly determinable than the fair value of the common shares deemed issued; therefore, the common shares were valued at the fair value of the net assets acquired as follows:

Cash	$	10,887,561
Note payable to Ring cancelled		2,003,122
Prepaid expenses		26,942
Property and equipment		187,637
Accounts payable		(9,893)
Fair value of net assets	$	13,095,369

Pro Forma Results from Operations – The following unaudited pro forma information is presented to reflect the operations of the Company as if the acquisitions had been completed on January 1, 2012 and 2011, respectively:

	For The Three	For The Three	For The Six	For The Six
	Months Ended	Months Ended	Months Ended	Months Ended
	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Oil and Natural Gas Revenues	$           342,522	$          259,972	$          670,525	$           557,756
Net Income (Loss)	(544,657)	1,603	(1,253,916)	23,158

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Acquisitions Oil And Gas Sales Income (Details) (USD $)	8 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Oil and natural gas sales and income from operations before general and administrative expense from the Fisher I Property	$ 166,250	$ 49,116
Cash consideration for acquisition Miocene Property	0	1,791,165
Acquisiton related costs Miocene Property	0	98,984
Oil and natural gas sales and income from operations before general and administrative expense from the Miocene Property	217,959	60,313
Acquisition realted costs Fisher I Property	$ 0	$ 30,673

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Employee Stock Options Compensation Expenses (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Compensation expense charged against income for share based wards	$ 154,348	$ 445,234

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2012	Dec. 31, 2011
Current Assets
Cash	$ 6,614,338	$ 11,372
Accounts receivable	90,754	91,022
Prepaid expenses and retainers	150,949	46,301
Total Current Assets	6,856,041	148,695
Properties and Equipment
Oil and natural gas properties subject to amortization	7,283,165	6,597,433
Office equipment	194,207	11,133
Total Properties and Equipment	7,477,372	6,608,566
Accumulated depreciation, depletion and amortization	(265,211)	(89,376)
Net Properties and Equipment	7,212,161	6,519,190
Refundable lease deposit	75,000	75,000
Total Assets	14,143,202	6,742,885
Current Liabilities
Accounts payable	413,120	100,321
Accrued compensation	0	100,000
Derivative put option	183,328	276,736
Revolving line of credit	5,000,000	0
Total Current Liabilities	5,596,448	477,057
Noncurrent Liabilities
Revolving line of credit.	0	9,244,428
Note payable to Ring Energy, Inc.	0	853,122
Asset retirement obligations	284,312	274,788
Total Noncurrent Liabilities	284,312	10,372,338
Stockholders Equity (Deficit)
Common stock - $0.001 par value; 75,000,000 shares authorized; 10,019,808 and 3,440,000 shares outstanding, respectively	10,020	3,440
Additional paid-in capital	13,738,608	204,585
Accumulated deficit	(5,486,186)	(4,314,535)
Total Stockholders Equity (Deficit)	8,262,442	(4,106,510)
Total Liabilities and Stockholders Equity (Deficit)	$ 14,143,202	$ 6,742,885

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Contingencies And Commitments (Details) (USD $)	Jun. 30, 2012
Standby letters of credit by a commercial bank	$ 50,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2012

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Consolidated Financial Statements – The accompanying consolidated financial statements have been prepared by the Company and are unaudited.  In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary for fair presentation, consisting of normal recurring adjustments, except as disclosed herein. The financial position and results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year ending December 31, 2012.

Organization and Nature of Operations –Stanford Energy, Inc. (“Stanford” or the “Company”) is a Texas corporation that owns interests in oil and natural gas properties located in Texas. The Company’s oil and natural gas sales, profitability and future growth are dependent upon prevailing and future prices for oil and natural gas and the successful acquisition, exploration and development of oil and natural gas properties. Oil and natural gas prices have historically been volatile and may be subject to wide fluctuations in the future. A substantial decline in oil and natural gas prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows and quantities of oil and natural gas reserves that may be economically produced.

Reorganization into Ring Energy, Inc. – On June 28, 2012, Ring Energy, Inc. (“Ring”) completed the acquisition of Stanford Energy, Inc. through the closing of a stock-for-stock exchange agreement dated May 3, 2012.  As a result, Stanford became a wholly-owned subsidiary of Ring. At the closing, the Stanford shareholders exchanged their 1,376 shares of Stanford common stock for 3,440,000 shares of Ring common stock. In addition, Ring assumed and adopted Stanford’s equity compensation plan and its outstanding options to purchase 450 shares of Stanford common stock, which represented the right to purchase 1,125,000 shares of Ring common stock at $2.00 per share. Prior to the closing, Ring had 6,110,408 shares of common stock outstanding, of which Stanford shareholders held 793,317 shares. As a result, Stanford’s shareholders obtained control of Ring under current accounting guidance.

Since the Stanford shareholders obtained a controlling interest in Ring’s common stock and stock options Stanford was determined to be the accounting acquirer and its historical financial statements have been adjusted to reflect its reorganization in a manner equivalent to a 2,500-for-1 stock split. The accompanying historical financial statements prior to the reorganization into Ring are Stanford’s financial statements, adjusted to reflect the authorized capital and par value of Ring and to reflect the effects of the stock split for all periods presented.

Predecessor Carve-Out Financial Statements – On May 1, 2011, Stanford acquired developed and undeveloped properties referred to as the Fisher I Property. The Fisher I Property represents Stanford’s predecessor under Rule 405 of Regulation C of the Securities Act of 1933, as amended, as the Fisher I Property was Stanford’s first interest in producing oil and natural gas properties and Stanford’s own operations before the acquisition were insignificant relative to the operations acquired. In that regard, upon consummation of the acquisition, the historical financial statements of the Fisher I Property became the historical financial statements of the Company. The accompanying predecessor financial statements present the full carve-out financial position, the related revenues earned and costs and expenses incurred, and the cash flows of the predecessor owners relative to the Fisher I Property.

Subsequent to the acquisition, the successor financial statements present the financial position, operations and cash flows of the assets acquired, the liabilities assumed and operations of the Fisher I Property as well as those of other properties acquired subsequently and are reflected at their purchase-date fair values. Those fair values are reflected as the cost of the assets acquired and the carrying amounts of the liabilities assumed, and are the basis of the resulting operations of the successor.

Prior to the acquisition of the Fisher I Property, Stanford had little activity and was a development stage company. Its planned operations were to acquire, develop and operate oil and natural gas properties. Stanford had no revenue, expenses or income during the four months ended April 30, 2011. Changes in Stanford’s stockholders’ equity for the four months ended April 30, 2011, on a post-split basis, were as follows:

					Additional		Total
	Common Stock				Paid-in		Stockholders'
	Shares	Amount			Capital		Equity
Balance, December 31, 2010	5,000,000	$	5,000	$	(5,000)	$	-
Common stock issued for no consideration	1,250,000		1,250		(1,250)		-
Cash paid in from shareholders without
the issuance of additional shares	-		-		206,000		206,000
Balance, April 30, 2011	6,250,000	$	6,250	$	199,750	$	206,000

Stanford’s cash flows during the four months ended April 30, 2011 were as follows:

Cash Flows from Investing Activities
	Payments to purchase oil and gas properties	$	(176,000)
Cash Flows From Financing Activities
	Capital contributions from shareholders		206,000
Net Increase in Cash			30,000
Cash at Beginning of Period			-
Cash at End of Period		$	30,000

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. Changes in the future estimated oil and natural gas reserves or the estimated future cash flows attributable to the reserves that are utilized for impairment analysis could have a significant impact on the Company’s future results of operations.

Fair Values of Financial Instruments – The carrying amounts reported for the revolving line of credit approximates fair value because the underlying instruments are at interest rates which approximate current market rates.  The derivative put options are carried at fair value.

Consolidation – The accompanying consolidated financial statements include the accounts, operations and cash flows of Stanford for all periods presented and the consolidated operations and cash flows of Ring from June 28, 2012. All significant intercompany balances and transactions have been eliminated in consolidation.

Concentration of Credit Risk and Major Customer – The Company has cash in excess of federally insured limits at June 30, 2012.  During the six months ended June 30, 2012, sales to three customers represented 39%, 37% and 22%, respectively, of oil and gas revenues.  At June 30, 2012, these customers made up 53%, 40% and 10%, respectively, of accounts receivable.

Oil and Gas Properties – The Company uses the full cost method of accounting for oil and gas properties.  Under this method, all costs associated with acquisition, exploration, and development of oil and gas reserves are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs.  Capitalized costs are categorized either as being subject to amortization or not subject to amortization.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves and estimated future costs of abandonment and site restoration, are amortized on the unit-of-production method using estimates of proved reserves as determined by independent engineers. Investments in unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined. The Company evaluates oil and gas properties for impairment at least annually. Amortization expense for the three and six months ended June 30, 2012 was $94,707 and $175,835, respectively, based on depletion at the rate of $19.87 per barrel of oil equivalent compared to $2,351 and $4,435, respectively, for the three and six months ended June 30, 2011, based on depletion at the rate of $21.24 per barrel of oil equivalent. These amounts include $10,850 and $21,001 of depreciation for the three and six months ended June 30, 2012, respectively, with no depreciation for the three or six months ended June 30, 2011.

In addition, capitalized costs are subject to a ceiling test which limits such costs to the estimated present value of future net revenues from proved reserves, discounted at a 10% interest rate, based on current economic and operating conditions, plus the lower of cost or fair market value of unproved properties. Consideration received from sales or transfers of oil and gas property is accounted for as a reduction of capitalized costs. Revenue is not recognized in connection with contractual services performed on properties in which the Company holds an ownership interest.

Office Equipment – Office equipment is valued at historical cost adjusted for impairment loss less accumulated depreciation.  Historical costs include all direct costs associated with the acquisition of office equipment and placing it in service.  Depreciation is calculated using the straight-line method based upon an estimated useful life of 5 to 7 years.

Asset Retirement Obligation – The Company records a liability in the period in which an asset retirement obligation (“ARO”) is incurred, in an amount equal to the discounted estimated fair value of the obligation that is capitalized.  Thereafter, this liability is accreted up to the final estimated retirement cost.  An ARO is a future expenditure related to the disposal or other retirement of certain assets. The Company’s ARO relates to future plugging and abandonment expenses of its oil and natural gas properties and related facilities disposal.

Revenue Recognition – The Company predominantly derives its revenues from the sale of produced oil and natural gas. Revenue is recorded in the month the product is delivered to the purchasers.  At the end of each month, the Company recognizes oil and natural gas sales based on estimates of the amount of production delivered to purchasers and the price to be received. Variances between the Company’s estimated oil and natural gas sales and actual receipts are recorded in the month the payments are received.

Share-Based Employee Compensation – The Company has outstanding stock option grants to directors and employees, which are described more fully in Note 7.  The Company recognizes the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the related compensation expense over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period.

Share-Based Compensation to Non-Employees – The Company accounts for share-based compensation issued to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.  The measurement date for these issuances is the earlier of the date at which a commitment for performance by the recipient to earn the equity instruments is reached or the date at which the recipient’s performance is complete.

Recent Accounting Pronouncements – The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements are expected to cause a material impact on the Company’s financial condition or the results of operations.

Basic and Diluted Earnings (Loss) per Share – Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.  Diluted earnings (loss) per share reflects the potential dilution that could occur if all contracts to issue common stock were converted into common stock, except for those that are anti-dilutive.  The dilutive effect of stock options and other share-based compensation is calculated using the treasury method with an offset from expected proceeds upon exercise of the stock options and unrecognized compensation expense.

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Acquisitions Fisher II Property Costs (Details) (USD $)	8 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Acquisition related costs Fisher II Property	$ 6,898	$ 0
Oil and natural gas sales and loss from operations before general and administrative expense from the Fisher II Property	$ 4,465	$ 7,416

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EMPLOYEE STOCK OPTIONS (Tables)

6 Months Ended

Jun. 30, 2012

EMPLOYEE STOCK OPTIONS (Tables)

Fair Value of options weighted average assumptions

The following are the weighted-average assumptions used to determine the fair value of options granted during the eight months ended December 31, 2011:

Risk free interest rate	0.97%
Expected life	6.5 years
Dividend yield	-
Volatility	32%

Stock option activity and changes

A summary of the stock option activity as of December 31, 2011, and changes during the eighth months then ended is as follows:

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Term	Value
Outstanding, April 30, 2011	-
Granted	1,125,000	$      2.00
Outstanding, December 31, 2011	1,125,000	$      2.00	9.9 Years	$2,205,000
Exercisable, December 31, 2011	-

Status of Stock Options

A summary of the status of the stock options as of June 30, 2012 is as follows:

	Options	Weighted-Average Exercise Price
Outstanding at December 31, 2011	1,125,000	$            2.00
Exercised	-	-
Outstanding at June 30, 2012	1,125,000	2.00
Exercisable at June 30, 2012	-	$                  -

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Acquisitions Ring Energy Inc (Details) (USD $)	Jun. 28, 2011
Issuance of common stock shares	6,110,408
Cash"	$ 10,887,561
Note payable to Ring cancelled	2,003,122
Prepaid expenses	26,942
Property and equipment	187,637
Accounts payable"	(9,893)
Fair value of net assets	$ 13,095,369

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Basis Of Presentation And Significant Accounting Policies Reorganization into Ring Energy Inc (Details) (USD $)	Jun. 28, 2012
Number of shares exchanged by Stanford Shareholders of Stanford common stock	1,376
Number of shares exchanged by Stanford Shareholders of Ring common stock	3,440,000
Number of outstanding options to purchase Stanford common stock	450
Number of common stock shares of Ring, right to purchase	1,125,000
Common stock price per share	$ 2.00
Common stock outstanding of Ring prior to the closing	6,110,408
Common stock outstanding by the Stanford of Ring prior to the closing	793,317

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EARNINGS (LOSS) PER SHARE INFORMATION

6 Months Ended

Jun. 30, 2012

EARNINGS (LOSS) PER SHARE INFORMATION

EARNINGS (LOSS) PER SHARE INFORMATION

NOTE 2 – EARNINGS (LOSS) PER SHARE INFORMATION

					Predecessor						Predecessor
	Successor				Carve-out		Successor				Carve-out
	For The Three		For The Two		For The		For The Six		For The Two		For The Four
	Months Ended		Months Ended		Month Ended		Months Ended		Months Ended		Months Ended
	June 30, 2012		June 30, 2011		April 30, 2011		June 30, 2012		June 30, 2011		April 30, 2011
Net Income (Loss)	$	(541,377)	$	(25,235)	$	10,690	$	(1,171,651)	$	(25,235)	$	8,322
Basic Weighted-Average Shares Outstanding		3,584,611		6,250,000		6,250,000		3,512,306		6,250,000		6,250,000
Effect of dilutive securities:
Stock options		-		-		-		-		-		-
Diluted Weighted-Average Shares Outstanding		3,584,611		6,250,000		6,250,000		3,512,306		6,250,000		6,250,000
Basic Earnings (Loss) per Share	$	(0.15)	$	-	$	-	$	(0.33)	$	-	$	-
Diluted Earnings (Loss) per Share	$	(0.15)	$	-	$	-	$	(0.33)	$	-	$	-

Stock options to purchase 1,125,000 shares of common stock were excluded from the computation of diluted earnings (loss) per share during the three and six months ended June 30, 2012 as their effect would have been anti-dilutive.  There were no stock options outstanding during the three or six months ended June 30, 2011.

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CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $)	Jun. 30, 2012	Dec. 31, 2011
Common stock par value	$ 0.001	$ 0.001
Common Stock shares authorized	75,000,000	75,000,000
Common Stock shares issued	10,019,808	3,440,000
Common stock shares outstanding	10,019,808	3,440,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2012

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

Consolidated Financial Statements

Consolidated Financial Statements – The accompanying consolidated financial statements have been prepared by the Company and are unaudited.  In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary for fair presentation, consisting of normal recurring adjustments, except as disclosed herein. The financial position and results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year ending December 31, 2012.

Organization and Nature of Operations

Organization and Nature of Operations –Stanford Energy, Inc. (“Stanford” or the “Company”) is a Texas corporation that owns interests in oil and natural gas properties located in Texas. The Company’s oil and natural gas sales, profitability and future growth are dependent upon prevailing and future prices for oil and natural gas and the successful acquisition, exploration and development of oil and natural gas properties. Oil and natural gas prices have historically been volatile and may be subject to wide fluctuations in the future. A substantial decline in oil and natural gas prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows and quantities of oil and natural gas reserves that may be economically produced.

Reorganization into Ring Energy, Inc

Reorganization into Ring Energy, Inc. – On June 28, 2012, Ring Energy, Inc. (“Ring”) completed the acquisition of Stanford Energy, Inc. through the closing of a stock-for-stock exchange agreement dated May 3, 2012.  As a result, Stanford became a wholly-owned subsidiary of Ring. At the closing, the Stanford shareholders exchanged their 1,376 shares of Stanford common stock for 3,440,000 shares of Ring common stock. In addition, Ring assumed and adopted Stanford’s equity compensation plan and its outstanding options to purchase 450 shares of Stanford common stock, which represented the right to purchase 1,125,000 shares of Ring common stock at $2.00 per share. Prior to the closing, Ring had 6,110,408 shares of common stock outstanding, of which Stanford shareholders held 793,317 shares. As a result, Stanford’s shareholders obtained control of Ring under current accounting guidance.

Since the Stanford shareholders obtained a controlling interest in Ring’s common stock and stock options Stanford was determined to be the accounting acquirer and its historical financial statements have been adjusted to reflect its reorganization in a manner equivalent to a 2,500-for-1 stock split. The accompanying historical financial statements prior to the reorganization into Ring are Stanford’s financial statements, adjusted to reflect the authorized capital and par value of Ring and to reflect the effects of the stock split for all periods presented.

Predecessor Carve-Out Financial Statements

Predecessor Carve-Out Financial Statements – On May 1, 2011, Stanford acquired developed and undeveloped properties referred to as the Fisher I Property. The Fisher I Property represents Stanford’s predecessor under Rule 405 of Regulation C of the Securities Act of 1933, as amended, as the Fisher I Property was Stanford’s first interest in producing oil and natural gas properties and Stanford’s own operations before the acquisition were insignificant relative to the operations acquired. In that regard, upon consummation of the acquisition, the historical financial statements of the Fisher I Property became the historical financial statements of the Company. The accompanying predecessor financial statements present the full carve-out financial position, the related revenues earned and costs and expenses incurred, and the cash flows of the predecessor owners relative to the Fisher I Property.

Subsequent to the acquisition, the successor financial statements present the financial position, operations and cash flows of the assets acquired, the liabilities assumed and operations of the Fisher I Property as well as those of other properties acquired subsequently and are reflected at their purchase-date fair values. Those fair values are reflected as the cost of the assets acquired and the carrying amounts of the liabilities assumed, and are the basis of the resulting operations of the successor.

Prior to the acquisition of the Fisher I Property, Stanford had little activity and was a development stage company. Its planned operations were to acquire, develop and operate oil and natural gas properties. Stanford had no revenue, expenses or income during the four months ended April 30, 2011. Changes in Stanford’s stockholders’ equity for the four months ended April 30, 2011, on a post-split basis, were as follows:

					Additional		Total
	Common Stock				Paid-in		Stockholders'
	Shares	Amount			Capital		Equity
Balance, December 31, 2010	5,000,000	$	5,000	$	(5,000)	$	-
Common stock issued for no consideration	1,250,000		1,250		(1,250)		-
Cash paid in from shareholders without
the issuance of additional shares	-		-		206,000		206,000
Balance, April 30, 2011	6,250,000	$	6,250	$	199,750	$	206,000

Stanford’s cash flows during the four months ended April 30, 2011 were as follows:

Cash Flows from Investing Activities
	Payments to purchase oil and gas properties	$	(176,000)
Cash Flows From Financing Activities
	Capital contributions from shareholders		206,000
Net Increase in Cash			30,000
Cash at Beginning of Period			-
Cash at End of Period		$	30,000

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. Changes in the future estimated oil and natural gas reserves or the estimated future cash flows attributable to the reserves that are utilized for impairment analysis could have a significant impact on the Company’s future results of operations.

Fair Values of Financial Instruments

Fair Values of Financial Instruments – The carrying amounts reported for the revolving line of credit approximates fair value because the underlying instruments are at interest rates which approximate current market rates.  The derivative put options are carried at fair value.

Consolidation

Consolidation – The accompanying consolidated financial statements include the accounts, operations and cash flows of Stanford for all periods presented and the consolidated operations and cash flows of Ring from June 28, 2012. All significant intercompany balances and transactions have been eliminated in consolidation.

Concentration of Credit Risk and Major Customer

Concentration of Credit Risk and Major Customer – The Company has cash in excess of federally insured limits at June 30, 2012.  During the six months ended June 30, 2012, sales to three customers represented 39%, 37% and 22%, respectively, of oil and gas revenues.  At June 30, 2012, these customers made up 53%, 40% and 10%, respectively, of accounts receivable.

Oil and Gas Properties

Oil and Gas Properties – The Company uses the full cost method of accounting for oil and gas properties.  Under this method, all costs associated with acquisition, exploration, and development of oil and gas reserves are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs.  Capitalized costs are categorized either as being subject to amortization or not subject to amortization.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves and estimated future costs of abandonment and site restoration, are amortized on the unit-of-production method using estimates of proved reserves as determined by independent engineers. Investments in unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined. The Company evaluates oil and gas properties for impairment at least annually. Amortization expense for the three and six months ended June 30, 2012 was $94,707 and $175,835, respectively, based on depletion at the rate of $19.87 per barrel of oil equivalent compared to $2,351 and $4,435, respectively, for the three and six months ended June 30, 2011, based on depletion at the rate of $21.24 per barrel of oil equivalent. These amounts include $10,850 and $21,001 of depreciation for the three and six months ended June 30, 2012, respectively, with no depreciation for the three or six months ended June 30, 2011.

In addition, capitalized costs are subject to a ceiling test which limits such costs to the estimated present value of future net revenues from proved reserves, discounted at a 10% interest rate, based on current economic and operating conditions, plus the lower of cost or fair market value of unproved properties. Consideration received from sales or transfers of oil and gas property is accounted for as a reduction of capitalized costs. Revenue is not recognized in connection with contractual services performed on properties in which the Company holds an ownership interest.

Office Equipment

Office Equipment – Office equipment is valued at historical cost adjusted for impairment loss less accumulated depreciation.  Historical costs include all direct costs associated with the acquisition of office equipment and placing it in service.  Depreciation is calculated using the straight-line method based upon an estimated useful life of 5 to 7 years.

Asset Retirement Obligation

Asset Retirement Obligation – The Company records a liability in the period in which an asset retirement obligation (“ARO”) is incurred, in an amount equal to the discounted estimated fair value of the obligation that is capitalized.  Thereafter, this liability is accreted up to the final estimated retirement cost.  An ARO is a future expenditure related to the disposal or other retirement of certain assets. The Company’s ARO relates to future plugging and abandonment expenses of its oil and natural gas properties and related facilities disposal.

Revenue Recognition

Revenue Recognition – The Company predominantly derives its revenues from the sale of produced oil and natural gas. Revenue is recorded in the month the product is delivered to the purchasers.  At the end of each month, the Company recognizes oil and natural gas sales based on estimates of the amount of production delivered to purchasers and the price to be received. Variances between the Company’s estimated oil and natural gas sales and actual receipts are recorded in the month the payments are received.

Share-Based Employee Compensation

Share-Based Employee Compensation – The Company has outstanding stock option grants to directors and employees, which are described more fully in Note 7.  The Company recognizes the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the related compensation expense over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period.

Share-Based Compensation to Non-Employees

Share-Based Compensation to Non-Employees – The Company accounts for share-based compensation issued to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.  The measurement date for these issuances is the earlier of the date at which a commitment for performance by the recipient to earn the equity instruments is reached or the date at which the recipient’s performance is complete.

Recent Accounting Pronouncements

Recent Accounting Pronouncements – The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements are expected to cause a material impact on the Company’s financial condition or the results of operations.

Basic and Diluted Earnings (Loss) per Share

Basic and Diluted Earnings (Loss) per Share – Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.  Diluted earnings (loss) per share reflects the potential dilution that could occur if all contracts to issue common stock were converted into common stock, except for those that are anti-dilutive.  The dilutive effect of stock options and other share-based compensation is calculated using the treasury method with an offset from expected proceeds upon exercise of the stock options and unrecognized compensation expense.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 13, 2012
Document and Entity Information
Entity Registrant Name	RING ENERGY, INC.
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Entity Central Index Key	0001384195
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		10,711,220
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

XML

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2012

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

Predecessor Carve-Out Financial Statements Changes in Stockholders equity

Changes in Stanford’s stockholders’ equity for the four months ended April 30, 2011, on a post-split basis, were as follows:

					Additional		Total
	Common Stock				Paid-in		Stockholders'
	Shares	Amount			Capital		Equity
Balance, December 31, 2010	5,000,000	$	5,000	$	(5,000)	$	-
Common stock issued for no consideration	1,250,000		1,250		(1,250)		-
Cash paid in from shareholders without
the issuance of additional shares	-		-		206,000		206,000
Balance, April 30, 2011	6,250,000	$	6,250	$	199,750	$	206,000

Predecessor Carve-Out Financial Statements Cash Flows

Stanford’s cash flows during the four months ended April 30, 2011 were as follows:

Cash Flows from Investing Activities
	Payments to purchase oil and gas properties	$	(176,000)
Cash Flows From Financing Activities
	Capital contributions from shareholders		206,000
Net Increase in Cash			30,000
Cash at Beginning of Period			-
Cash at End of Period		$	30,000

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	1 Months Ended	2 Months Ended	3 Months Ended	4 Months Ended	6 Months Ended
	Apr. 30, 2011	Jun. 30, 2011	Jun. 30, 2012	Apr. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Oil and Gas Revenues	$ 26,948	$ 12,477	$ 342,522	$ 96,956	$ 670,525	$ 12,477
Costs and Operating Expenses
Oil and gas production costs	11,889	8,549	218,074	71,656	375,255	8,549
Oil and gas production taxes	1,242	575	15,875	4,468	32,625	575
Depreciation, depletion and amortization	694	1,657	94,707	2,778	175,835	1,657
Accretion expense	933	781	4,762	3,732	9,524	781
General and administrative expense	1,500	22,856	497,190	6,000	1,154,499	22,856
Total Costs and Operating Expenses	16,258	34,418	830,608	88,634	1,747,738	34,418
Other Income (Expense)
Gain on derivative put options	0	5,460	40,720	0	93,408	5,460
Interest expense	0	(8,754)	(94,011)	0	(187,846)	(8,754)
Net Other Income (Expense)	0	(3,294)	(53,291)	0	(94,438)	(3,294)
Net Income (Loss)	$ 10,690	$ (25,235)	$ (541,377)	$ 8,322	$ (1,171,651)	$ (25,235)
Basic Earnings (Loss) per Share	$ 0.00	$ 0.00	$ (0.15)	$ 0.00	$ (0.33)	$ 0.00
Diluted Earnings (Loss) per Share	$ 0.00	$ 0.00	$ (0.15)	$ 0.00	$ (0.33)	$ 0.00

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CONTINGENCIES AND COMMITMENTS

6 Months Ended

Jun. 30, 2012

CONTINGENCIES AND COMMITMENTS

CONTINGENCIES AND COMMITMENTS

NOTE 7 – CONTINGENCIES AND COMMITMENTS

Standby Letters of Credit – A commercial bank has issued standby letters of credit on behalf of the Company to the state of Texas totaling $50,000 to allow the Company to do business there.  The standby letters of credit are valid until cancelled or matured and are collateralized by the revolving credit facility with the bank.  These letters of credit terms are extended for a term of one year at a time.  The Company intends to renew the standby letters of credit for as long as the Company does business in the state of Texas. No amounts have been drawn under the standby letters of credit.

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EMPLOYEE STOCK OPTIONS

6 Months Ended

Jun. 30, 2012

EMPLOYEE STOCK OPTIONS

EMPLOYEE STOCK OPTIONS

NOTE 6 – EMPLOYEE STOCK OPTIONS

Compensation expense charged against income for share-based awards during the three and six months ended June 30, 2012 was $154,348 and $445,234, respectively, with no comparable amounts for the three and six months ended June 30, 2011, and is included in general and administrative expense in the accompanying financial statements.

In 2011, Stanford’s Board of Directors and stockholders approved and adopted a long-term incentive plan which allows for the issuance of up to 2,500,000 shares of common stock through the grant of qualified stock options, non-qualified stock options and restricted stock. As of December 31, 2011, there were 1,375,000 shares eligible for issuance under the plan. On December 1, 2011, the Company granted 1,125,000 non-qualified stock options exercisable at $2.00 per share. The stock options vest at the rate of 20% each year over five years beginning one year from the date granted and expire ten years from the date granted.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model and using certain assumptions. The expected volatility is based on the historical price volatility of the Dow Jones U.S. Oil and Gas Index. The Company used the simplified method for estimating the expected term for options granted in 2011. Under the simplified method, the expected term is equal to the midpoint between the vesting period and the contractual term of the stock option. The risk-free interest rate represents the U.S. Treasury bill rate for the expected life of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected life of the stock options. The following are the weighted-average assumptions used to determine the fair value of options granted during the eight months ended December 31, 2011:

Risk free interest rate	0.97%
Expected life	6.5 years
Dividend yield	-
Volatility	32%

A summary of the stock option activity as of December 31, 2011, and changes during the eighth months then ended is as follows:

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Term	Value
Outstanding, April 30, 2011	-
Granted	1,125,000	$      2.00
Outstanding, December 31, 2011	1,125,000	$      2.00	9.9 Years	$2,205,000
Exercisable, December 31, 2011	-

The weighted-average grant-date fair value of options granted during 2011 was $2.32 per share. Share-based compensation expense for the eight months ended December 31, 2011 was $95,897. As of December 31, 2011, there was approximately $2,463,620 of unrecognized compensation cost related to stock options that is expected be recognized over a weighted-average period of 2.9 years. The aggregate intrinsic value was determined based on the $4.00 market value of the Ring Energy, Inc. common stock on December 31, 2011.

A summary of the status of the stock options as of June 30, 2012 is as follows:

	Options	Weighted-Average Exercise Price
Outstanding at December 31, 2011	1,125,000	$            2.00
Exercised	-	-
Outstanding at June 30, 2012	1,125,000	2.00
Exercisable at June 30, 2012	-	$                  -

As of June 30, 2012, there was approximately $1,440,189 of unrecognized compensation cost related to stock options that will be recognized over a weighted average period of 2.96 years.  The aggregate intrinsic value of options expected to vest at June 30, 2012 was $2,632,500.  No options were exercisable as of June 30, 2012.  The intrinsic value calculations are based on a June 29, 2012 closing price of the Company’s common stock of $5.12.

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PUT OPTIONS (Tables)

6 Months Ended

Jun. 30, 2012

PUT OPTIONS (Tables)

Assumptions used in Black-Scholes option pricing model

The following table illustrates the assumptions used in the Black-Scholes option pricing model at June 30, 2012:

Risk free interest rate	0.16%
Expected life (years)	0.42
Dividend yield	-
Volatility	158%

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EARNINGS (LOSS) PER SHARE INFORMATION (Tables)

6 Months Ended

Jun. 30, 2012

EARNINGS (LOSS) PER SHARE INFORMATION (Tables)

Earnings (Loss) Per Share Information

					Predecessor						Predecessor
	Successor				Carve-out		Successor				Carve-out
	For The Three		For The Two		For The		For The Six		For The Two		For The Four
	Months Ended		Months Ended		Month Ended		Months Ended		Months Ended		Months Ended
	June 30, 2012		June 30, 2011		April 30, 2011		June 30, 2012		June 30, 2011		April 30, 2011
Net Income (Loss)	$	(541,377)	$	(25,235)	$	10,690	$	(1,171,651)	$	(25,235)	$	8,322
Basic Weighted-Average Shares Outstanding		3,584,611		6,250,000		6,250,000		3,512,306		6,250,000		6,250,000
Effect of dilutive securities:
Stock options		-		-		-		-		-		-
Diluted Weighted-Average Shares Outstanding		3,584,611		6,250,000		6,250,000		3,512,306		6,250,000		6,250,000
Basic Earnings (Loss) per Share	$	(0.15)	$	-	$	-	$	(0.33)	$	-	$	-
Diluted Earnings (Loss) per Share	$	(0.15)	$	-	$	-	$	(0.33)	$	-	$	-

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INCOME TAXES

6 Months Ended

Jun. 30, 2012

INCOME TAXES

INCOME TAXES

NOTE 10 – INCOME TAXES

Through December 31, 2011, Stanford Energy, Inc. and the predecessor were not taxable entities for U.S. federal income tax purposes. Under Stanford Energy, Inc.’s S-corporation election and the predecessor’s tax status, income taxes were generally borne by the shareholders/owners and losses were generally deductible at the shareholder/owner level. Accordingly, no recognition has been given to federal income tax or benefit in the accompanying financial statements.

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PUT OPTIONS

6 Months Ended

Jun. 30, 2012

PUT OPTIONS

PUT OPTIONS

NOTE 8 – PUT OPTIONS

The Company granted put options on the Ring shares transferred in connection with the acquisitions of oil and natural gas properties in December 2011.  In December 2011, the Company granted 80,000 options with terms allowing the property seller to require the Company to repurchase the Ring shares at $5.00 per share through December 1, 2012.  At the date of issuance, the fair value of this liability was $277,760 and was capitalized as part of the acquisition cost.  The put options are contingent consideration classified as liabilities under FASB ASC 305-30 and are recognized at the acquisition date fair value as part of the consideration transferred.  They are remeasured to fair value at each reporting date until the contingency is resolved with the change in fair value being recognized in earnings.  As of June 30, 2012, the fair value of the remaining liability was $183,328.  The following table illustrates the assumptions used in the Black-Scholes option pricing model at June 30, 2012:

Risk free interest rate	0.16%
Expected life (years)	0.42
Dividend yield	-
Volatility	158%

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2012

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 9 – FAIR VALUE MEASUREMENTS

Generally accepted accounting principles establish a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company’s fair value measurements are based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

• Level 1 — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.  The Company does not have any fair value balances classified as Level 1.

• Level 2 — Inputs other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable.  The Company’s put options are measured on a recurring basis using Level 2 inputs.

• Level 3 — Includes inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured.  The Company does not have any fair value balances classified as Level 3.

In valuing certain contracts, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The Company’s derivative put option liabilities are remeasured to fair value at each reporting date until the contingency is resolved.  The fair value of the non-financial liabilities as of June 30, 2012 was $183,328 and was calculated using Level 2 inputs. See Note 8 above for more information about this liability and the inputs used for calculating fair value.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2012

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

Subsequent to June 30, 2012, the Company sold 63,520 shares of common stock for gross proceeds of $268,812.50 in a private placement at $4.25 per common share.  No selling commissions were paid.

Also subsequent to June 30, 2012, the Company sold 627,892 shares of common stock for gross proceeds of $2,825,497 in a private placement at $4.50 per common share.  No selling commissions were paid.

Subsequent to June 30, 2012, the Company drilled five wells in Texas.  None of the wells have yet been completed and put into operation.  It is anticipated that these wells will be completed and placed into service during the third quarter.

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Acquisitions Fisher II Property (Details) (USD $)	Dec. 01, 2011
Total cosideration by Fisher I Property,	$ 1,747,760
Cash consideration,	1,150,000
Shares transferred,	80,000
Common stock par value,.	$ 4.00
Common stock valued,.	320,000
The issuance of a put option relating to the Ring shares valued,.	277,760
Common stock price per share,.	$ 5.00
Risk free interest rate,.	0.11
Dividend yield,..	0
Expected life,.	1.0
Volatility,.	198
Proved developed and undeveloped oil and gas properties,.	1,915,152
Asset retirement obligation,.	(167,392)
Total Identifiable Net Assets,.	$ 1,747,760

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ASSET RETIREMENT OBLIGATION (Tables)

6 Months Ended

Jun. 30, 2012

ASSET RETIREMENT OBLIGATION (Tables)

Changes in Asset Retirement Obligations

Changes in the asset retirement obligation were as follows:

Balance, January 1, 2012	$	274,788
Accretion expense		9,524
Balance, June 30, 2012	$	284,312

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Basis Of Presentation And Significant Accounting Policies Percentage Of Customers (Details)	6 Months Ended
	Jun. 30, 2012
Percentage of sales to customers of oil and gas revenues	39
Percentage of sales to customers of oil and gas revenues,	37
Percentage of sales to customers of oil and gas revenues.	22

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Employee Stock Options Compensation Stanfords Board Of Directors (Details) (USD $)	Dec. 31, 2011
Issuance of shares common stock	2,500,000
Shares eligible for issuance	1,375,000
Non qualified stock options granted	1,125,000
Stock options exercise price	$ 2.00
Stock options vesting rate	20

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	2 Months Ended	4 Months Ended	6 Months Ended
	Jun. 30, 2011	Apr. 30, 2011	Jun. 30, 2012
Cash Flows From Operating Activities
Net income (loss).	$ (25,235)	$ 8,322	$ (1,171,651)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization.	1,657	2,778	175,835
Accretion expense.	781	3,732	9,524
Share-based compensation.	0	0	445,234
Gain on derivative put options.	(5,460)	0	(93,408)
Changes in assets and liabilities:
Accounts receivable.	(33,396)	4,677	268
Prepaid expenses.	0	0	(77,706)
Accounts payable.	18,656	6,907	302,906
Accrued compensation.	0	0	(100,000)
Net Cash Provided by (Used in) Operating Activities	(42,997)	26,416	(508,998)
Cash Flows from Investing Activities
Payments to purchase oil and natural gas properties	(2,073,428)	0	(28,006)
Payments to develop oil and natural gas properties	(15,560)	0	(474,085)
Purchase of office equipment	0	0	(179,078)
Net Cash Used in Investing Activities	(2,088,988)	0	(681,169)
Cash Flows From Financing Activities
Proceeds from borrowings from Ring Energy, Inc.	0	0	1,150,000
Proceeds from borrowings under revolving line of credit	2,073,428	0	0
Proceeds from issuance of common stock to Ring Energy, Inc. shareholders	0	0	10,887,561
Principal payments on revolving line of credit	0	0	(4,244,428)
Capital contributions from shareholders.	50,000	0	0
Capital distributions to owners.	0	(26,416)	0
Net Cash Provided by (Used in) Financing Activities	2,123,428	(26,416)	7,793,133
Net Increase (Decrease) in Cash	(8,557)	0	6,602,966
Cash at Beginning of Period	30,000	0	11,372
Cash at End of Period	21,443	0	6,614,338
Supplemental Cash Flow Information
Cash paid for interest	8,754	0	93,471
Noncash Investing and Financing Activities
Oil and natural gas properties acquired	2,248,605	0	0
Asset retirement obligations assumed	(62,255)	0	0
Payments with Ring Energy, Inc. shares	(40,000)	0	0
Derivative put option incurred	(72,922)	0	0
Cash payments for oil and natural gas properties acquired	2,073,428	0	0
Issuance of common stock to Ring Energy, Inc. shareholders	0	0	13,095,369
Accounts payable assumed	0	0	9,893
Less: Elimination of note payable to Ring Energy, Inc.	0	0	(2,003,122)
Less: Prepaid expenses acquired	0	0	(26,942)
Less: Property and equipment acquired	0	0	(187,637)
Proceeds from issuance of common stock to Ring Energy, Inc. shareholders.	0	0	10,887,561
Capital contribution of Ring Energy, Inc. common stock	$ 40,000	$ 0	$ 0

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ASSET RETIREMENT OBLIGATION

6 Months Ended

Jun. 30, 2012

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION

NOTE 5 – ASSET RETIREMENT OBLIGATION

The Company provides for the obligation to plug and abandon oil and gas wells at the dates properties are either acquired or the wells are drilled.  The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion expense and any revisions made to the estimated cash flows. The asset retirement obligation relating to the predecessor carve-out financial statements was computed using an annual credit-adjusted risk-free discount rate of 4.28%. The asset retirement obligation incurred by Stanford upon each of the three acquisitions was computed using the annual credit-adjusted risk-free discount rate at the applicable date, which rates were from 6.55% to 7.62% per annum.  Changes in the asset retirement obligation were as follows:

Balance, January 1, 2012	$	274,788
Accretion expense		9,524
Balance, June 30, 2012	$	284,312

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Basis Of Presentation And Significant Accounting Policies Accounts Receivable (Details)	Jun. 30, 2012
Percentage of customers accounts receivable	53

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Revolving Line Of Credit (Details) (USD $)	Jun. 30, 2012
Line Of Credit	$ 10,000,000
Draw down of line of credit	$ 4,950,000
Percentage of commitment fee	0.20
Interest rate	0.75
Interest rate less than the charged	4.00

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ACQUISITIONS (Tables)

6 Months Ended

Jun. 30, 2012

ACQUISITIONS (Tables)

Summary of assets acquired and the liabilities assumed

The following table summarizes the assets acquired and the liabilities assumed:

Proved developed and undeveloped oil and gas properties	$	2,358,483
Asset retirement obligation		(62,255)
Total Identifiable Net Assets	$	2,296,228

Summary of Fair Value of assets acquired and the liabilities assumed

The following table summarizes the fair values of the assets acquired and the liabilities assumed:

Assets Acquired
Accounts receivable	$	52,278
Proved developed and undeveloped oil and gas properties		1,810,662
Liabilities Assumed
Accounts payable		(32,181)
Asset retirement obligation		(39,594)
Total Identifiable Net Assets	$	1,791,165

Summary of Fair Value of assets acquired and the liabilities assumed Fisher II

The following table summarizes the fair values of the assets acquired and the liabilities assumed:

Proved developed and undeveloped oil and gas properties	$	1,915,152
Asset retirement obligation		(167,392)
Total Identifiable Net Assets	$	1,747,760

Fair Value of the Net Assets Acquired

The common shares were valued at the fair value of the net assets acquired as follows:

Cash	$	10,887,561
Note payable to Ring cancelled		2,003,122
Prepaid expenses		26,942
Property and equipment		187,637
Accounts payable		(9,893)
Fair value of net assets	$	13,095,369

Pro Forma Results from Operations

Pro Forma Results from Operations – The following unaudited pro forma information is presented to reflect the operations of the Company as if the acquisitions had been completed on January 1, 2012 and 2011, respectively:

	For The Three	For The Three	For The Six	For The Six
	Months Ended	Months Ended	Months Ended	Months Ended
	June 30, 2012	June 30, 2011	June 30, 2012	June 30, 2011
Oil and Natural Gas Revenues	$           342,522	$          259,972	$          670,525	$           557,756
Net Income (Loss)	(544,657)	1,603	(1,253,916)	23,158