Basis of Presentation |
9 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Basis of Presentation | |
| Basis of Presentation |
Note 1: Basis of Presentation
Interim Period - The accompanying unaudited financial statements of Ring Energy, Inc. (the Company) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. Management of the Company (Management) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Companys Form 10-K report for the year ended December 31, 2010.
These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the nine months ended September 30, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.
Development Stage Entity The Company is considered a development stage entity because its principal oil and gas operations are minimal and have not produced any significant revenue. Total revenue of $16,744 has been recognized since commencement of oil production, but the cost of production and the associated depreciation, depletion and amortization has resulted in a net loss from oil and gas operations of $1,633. Furthermore, the Company has determined that further development of its current leasehold interest is unlikely and has impaired all capitalized costs not expensed as depreciation, depletion and amortization. During the three month period ended September 30, 2011, the Company entered into a letter of intent (LOI) described in Note 4 to these financial statements, and paid a non-refundable transaction fee of $250,000. At September 30, 2011, the Company has cash available to pursue its efforts to acquire oil and gas interests of approximately $620,000; however, until such time as the results of its oil and gas operations are profitable, the Company will be considered a development stage entity. |