Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Cash Flows From Operating Activities    
Net Loss $ (1,987,166) $ (1,803,104)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation, depletion and amortization 1,657,386 293,102
Accretion expense 37,183 14,287
Share-based compensation 2,598,046 707,090
Gain on derivative put options 0 (146,632)
Changes in assets and liabilities:    
Accounts receivable (1,304,357) (39,794)
Prepaid expenses (8,169) 27,537
Accounts payable 4,056,603 1,558,156
Accrued compensation 0 (100,000)
Net Cash Provided by Operating Activities 5,049,526 510,642
Cash Flows from Investing Activities    
Payments to purchase oil and natural gas properties (4,125,676) (124,050)
Payments to develop oil and natural gas properties (17,356,478) (4,711,752)
Purchase of office equipment (82,805) (179,078)
Net Cash Used in Investing Activities (21,564,959) (5,014,880)
Cash Flows From Financing Activities    
Proceeds from borrowings from Ring Energy, Inc. 0 1,150,000
Proceeds from issuance of common stock 18,978,882 11,545,983
Proceeds from issuance of common stock to Ring Energy, Inc. shareholders 0 10,887,561
Principal payments on revolving line of credit 0 (9,244,428)
Net Cash Provided by Financing Activities 18,978,882 14,339,116
Net Increase in Cash 2,463,449 9,834,878
Cash at Beginning of Period 5,404,167 11,372
Cash at End of Period 7,867,616 9,846,250
Supplemental Cash Flow Information    
Cash paid for interest 0 93,471
Noncash Investing and Financing Activities    
Oil and gas properties acquired 0 825,765
Revision of asset retirement obligation estimate 211,691 0
Asset retirement obligation incurred during development 309,838 (14,214)
Payments with Ring Energy, Inc. shares 0 (687,501)
Issuance of common stock to Ring Energy, Inc. shareholders 0 13,095,369
Accounts payable assumed 0 9,893
Less: Elimination of note payable to Ring Energy, Inc. 0 (2,003,122)
Less: Prepaid expenses acquired 0 (26,942)
Less: Property and equipment acquired $ 0 $ (187,637)