Company: REI
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001384195-25-000018
Chunk: 103

Company: RING ENERGY, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 103
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 the "Lime Rock Assets"). On March 31, 2025, the Company and Lime Rock consummated the transactions contemplated in the Lime Rock Acquisition whereby the Company acquired the Lime Rock Assets for aggregate consideration consisting of: (i) approximately $69.3 million in cash, net of customary purchase price adjustments, paid at the closing of the Lime Rock Acquisition, (ii) $10.0 million to be paid by December 31, 2025, and (iii) 6,452,879 shares of common stock. 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.

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The following table represents the final allocation of the total cost of the Lime Rock Acquisition to the assets acquired and liabilities assumed as of the Lime Rock Acquisition date:Consideration:Common stock considerationShares of common stock issued6,452,879 Common stock price as of March 31, 2025$1.15 Total common stock consideration$7,420,811 Cash considerationEscrow deposit released at closing$5,000,000 Closing amount paid to Lime Rock63,599,939 Fair value of deferred payment liability9,415,066 Post-close adjustments721,116 Total cash consideration$78,736,121 Direct transaction costs2,576,648 Total consideration$88,733,580 Fair value of assets acquired:Oil and natural gas properties$92,111,309 Fixed assets34,275 Joint interest billing receivable39,820 Amount attributable to assets acquired$92,185,404 Fair value of liabilities assumed:Suspense liability$459,096 Asset retirement obligations2,587,179 Ad valorem tax liability405,549 Amount attributable to liabilities assumed$3,451,824 Net assets acquired$88,733,580 

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NOTE 6 — DERIVATIVE FINANC