Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 4 Months Ended 8 Months Ended 12 Months Ended
Apr. 30, 2011
Dec. 31, 2011
Dec. 31, 2012
Cash Flows From Operating Activities      
Net income (loss) for the period $ 8,322 $ 63,165 $ (1,669,283)
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation, depletion and amortization 2,778 89,376 506,786
Accretion expenses. 3,732 5,547 20,906
Share-based compensation 0 95,897 944,681
Gain on derivative put option. 0 (73,946) (276,736)
Gain on change in value of Ring Energy, Inc. common stock 0 (160,000) 0
Interest expense on advances from Ring Energy, Inc. 0 3,122 0
Provision for incomes taxes 0 0 (300,324)
Accounts receivables. 4,677 (38,744) (326,943)
Prepaid expense. 0 (121,301) 87,845
Accounts payables. 6,907 68,140 1,081,217
Accrued compensation, 0 100,000 (100,000)
Net Cash Provided by (Used in) Operating Activities 26,416 31,256 (31,851)
Cash Flows from Investing Activities      
Payments to purchase oil and natural gas properties 0 (5,144,565) (3,684,674)
Payments to develop oil and natural gas properties 0 (317,042) (6,532,898)
Purchase of office equipment 0 (11,133) (159,977)
Net Cash Used in Investing Activities 0 (5,472,740) (10,377,549)
Cash Flows From Financing Activities      
Proceeds from borrowings from Ring Energy, Inc. 0 850,000 1,150,000
Proceeds from borrowings under revolving line of credit 0 9,244,428 0
Proceeds from issuance of common stock 0 0 13,009,062
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 (9,244,428)
Redemption of common stock 0 (4,521,572) 0
Capital contributions from shareholders 0 100,000 0
Capital distributions to owners (26,416) (250,000) 0
Net Cash Provided by (Used in) Financing Activities (26,416) 5,422,856 15,802,195
Net Increase (Decrease) in Cash 0 (18,628) 5,392,795
Cash at Beginning of Period 0 30,000 11,372
Cash at End of Period 0 11,372 5,404,167
Supplemental Cash Flow Information      
Cash paid for interest 0 91,097 221,927
Noncash Investing and Financing Activities      
Oil and natural gas properties acquired 0 6,104,391 9,689,488
Accounts receivable acquired 0 52,278 0
Deferred tax liability assumed (net) 0 0 (1,362,665)
Accounts payable assumed 0 (32,181) 0
Asset retirement obligations assumed 0 (269,241) (152,148)
Payments with Ring Energy, Inc. shares 0 (360,000) (4,490,001)
Derivative put option incurred 0 (350,682) 0
Cash payments for oil and natural gas properties acquired 0 5,144,565 3,684,674
Issuance of common stock to Ring Energy, Inc. shareholders 0 0 13,531,760
Accounts payables assumed. 0 0 9,893
Less: Tax benefit 0 0 (436,391)
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 $ 0 $ 200,000 $ 0