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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


SCHEDULE 14A

Proxy Statement Pursuant to Section

PROXY STATEMENT PURSUANT TO SECTION 14(a) of the Securities Exchange Act ofOF THE
SECURITIES EXCHANGE ACT OF 1934


Filed by the Registrant  X.☒


Filed by a Party other than the Registrant .


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Check the appropriate box:

☒

 X.

Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under Rule 14a-12


Materials Pursuant to §240.14a-12

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RING ENERGY, INC.

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(Name of the Registrant as Specified Inin Its Charter)


N/A

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(NameNames of Person(s) Filing Proxy Statement, if other than the Registrant)

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Payment of Filing Fee (Check all boxes that apply):
☒

Payment of Filing Fee (Check the appropriate box):

 X

No fee required
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☐.

No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)

Title of each class of securities to which transaction applies:

(2)

Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0–11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0–11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:


Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
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RING ENERGY, INC.

6555 South Lewis Street

Tulsa, OK 74136

(918) 499-3880


NOTICE

TABLE OF SOLICITATION OF CONSENTS

CONTENTS


January __, 2013

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Ring Energy, Inc.

TO OUR SHAREHOLDERS:

1725 Hughes Landing Blvd., Suite 900

This NoticeThe Woodlands, TX 77380
Phone: 281-397-3699

[•], 2022
To the Stockholders of SolicitationRing Energy, Inc.:
You are cordially invited to attend a Special Meeting of ConsentsStockholders (the “Special Meeting”) of Ring Energy, Inc. (the “Company”), to be held at [•] Central Time on [•], [•], 2022, at the Company’s office at the address shown above.
Your vote is very important, regardless of the number of shares of our common stock that you own. Whether or not you expect to be present at the Special Meeting, after receiving the proxy materials, please vote as promptly as possible to ensure your representation and accompanying Consent Solicitation Statementthe presence of a quorum at the Special Meeting. As an alternative to voting during the Special Meeting, you may vote via the Internet, by telephone, or by signing, dating and returning the proxy card that is included with the proxy statement. If your shares are furnishedheld in the name of a broker, trust, bank or other nominee, and you receive these materials through your broker or through another intermediary, please complete and return the materials in accordance with the instructions provided to you by such broker or other intermediary or contact your broker directly in order to obtain a proxy issued to you by your nominee holder to attend the Special Meeting and vote in person. Failure to do so may result in your shares not being eligible to be voted by proxy at the Special Meeting.
On behalf of the Board of Directors, I urge you to submit your vote as soon as possible, even if you currently plan to attend the Special Meeting in person.
Thank you for your support of the Company. I look forward to seeing you at the Special Meeting.
By Order of the Board of Directors,
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Paul D. McKinney
Chief Executive Officer and Chairman of the Board
[•], 2022

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Ring Energy, Inc.
1725 Hughes Landing Blvd., Suite 900
The Woodlands, Texas 77380
Phone: 281-397-3699
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [•], 2022
A Special Meeting of Stockholders (the “Special Meeting”) of Ring Energy, Inc., a Nevada corporation (the ““Company”), will be held at [•] Central Time, on [•], [•], 2022, at the Company’s office at the address shown above. We will consider and act on the following items of business at the Special Meeting:
1.
To approve, pursuant to NYSE American Listing Rule 712(b), the issuance of 42,548,903 shares of common stock, par value $0.001 per share, upon conversion of 153,176 shares of Series A Convertible Preferred Stock, par value $0.001 per share;
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2.
To authorize the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve and adopt the proposal listed above; and
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Such other matters as may properly come before the Special Meeting or any adjournment(s) or postponement(s) thereof.
Stockholders are referred to the accompanying proxy statement for more detailed information with respect to the matters to be considered at the Special Meeting. After careful consideration, the Board of Directors unanimously recommends a vote “FOR” Proposals 1 and 2.
The Board of Directors has fixed the close of business on September 1, 2022, as the record date (the “Record Date”) for the Special Meeting. Only holders of record of shares of our common stock on the Record Date are entitled to receive notice of the Special Meeting and to vote at the Special Meeting or at any postponement(s) or adjournment(s) of the Special Meeting. A complete list of registered stockholders entitled to vote at the Special Meeting will be available for examination during normal business hours for ten calendar days before the Special Meeting at our address above.
YOUR VOTE AND PARTICIPATION IN THE COMPANY’S AFFAIRS ARE IMPORTANT.
If your shares are registered in your name, even if you plan to attend the Special Meeting or any postponement or adjournment of the Special Meeting in person, we request that you complete, date, sign and mail the enclosed form of proxy in accordance with the instructions set out in the form of proxy and in the proxy statement to ensure that your shares will be represented at the Special Meeting.
If your shares are held in the name of a broker, trust, bank or other nominee, and you receive these materials through your broker or through another intermediary, please complete and return the materials in accordance with the instructions provided to you by such broker or other intermediary or contact your broker directly in order to obtain a proxy issued to you by your nominee holder to attend the Special Meeting and vote in person. Failure to do so may result in your shares not being eligible to be voted by proxy at the Special Meeting.
By Order of the Board of Directors,
​
Travis T. Thomas
Secretary
[•], 2022

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Ring Energy, Inc.
1725 Hughes Landing Blvd., Suite 900
The Woodlands, Texas 77380
Phone: 281-397-3699
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PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD [•], 2022
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This proxy statement is furnished in connection with the solicitation of proxies from the stockholders of Ring Energy, Inc., a Nevada corporation, to be voted at our special meeting of Stockholders (the “Special Meeting”) to be held at the Company’s office at the address shown above. YOUR PROXY IS SOLICITED BY RING ENERGY’S BOARD OF DIRECTORS. If not otherwise specified, all proxies received pursuant to this solicitation will be voted “FOR” the proposals as specified in this proxy statement and, at the discretion of the proxy holder, upon such other matters as may properly come before the Special Meeting or any adjournment thereof. This proxy statement (including the Notice of Special Meeting of Stockholders) is first being made available to stockholders beginning on or before [•], 2022. This proxy statement and its exhibits, the Notice of Special Meeting, proxy card, and stockholder letter are collectively referred to herein as the “Meeting Materials.”
Proxy Voting
Stockholders of record on the record date are entitled to vote by proxy before the meeting in the following ways:
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By calling 1-800-690-6903
(toll free) in the
United States or Canada
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Online at
www.proxyvote.com
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By returning a
properly completed, signed
and dated proxy card
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Solicitation/Cost of the Meeting
Proxies are being solicited by the Board of Directors of the Company (the “Board”). The costs of the solicitation will be borne by the Company. Proxies may be solicited personally or by mail, telephone, facsimile or email by directors, officers and employees of the Company, none of whom will receive any additional compensation for such solicitations. The Company will reimburse banks, brokers, nominees, custodians and fiduciaries for their reasonable out-of-pocket expenses incurred in sending the Meeting Materials to beneficial owners of the Company’s shares.

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ABOUT THIS PROXY STATEMENT
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE PROPOSALS
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
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PROPOSAL ONE – APPROVAL OF CONVERSION OF PREFERRED STOCK INTO COMMON STOCK
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PROPOSAL TWO – ADJOURNMENT
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THE RECENT STRONGHOLD ACQUISITION
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RISK FACTORS
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THE PURCHASE AND SALE AGREEMENT
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AGREEMENTS RELATED TO THE STRONGHOLD ACQUISITION AND THE PREFERRED STOCK
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INFORMATION ABOUT STRONGHOLD
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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DESCRIPTION OF CAPITAL STOCK
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OTHER MATTERS
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PROXY SOLICITATION AND COSTS
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INFORMATION INCORPORATED BY REFERENCE
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WHERE YOU CAN FIND MORE INFORMATION
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AVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO STOCKHOLDERS
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​Annex A-1 – Purchase and Sale Agreement*​​​​​​​
​Annex A-2 – First Amendment to Purchase and Sale Agreement**​​​​​​​
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Annex B – Fairness Opinion
​​​​B-1​​
​Annex C – Registration Rights Agreement***​​​​​​​
​Annex D – Lock-up Agreement***​​​​​​​
​Annex E – Director Nomination Agreement***​​​​​​​
​Annex F – Certificate of Designation of the Series A Convertible Preferred Stock***​​​​​​​
​Annex G – Second Amended and Restated Credit Agreement***​​​​​​​
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*
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Ring Energy, Inc. with the Securities and Exchange Commission on July 8, 2022.
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**
Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Ring Energy, Inc. with the Securities and Exchange Commission on August 9, 2022.
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***
Incorporated by reference to Exhibits 3.1, 10.1, 10.2, 10.3 and 10.4 to the Current Report on Form 8-K filed by Ring Energy, Inc., filed with the Securities and Exchange Commission on September 6, 2022.
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ABOUT THIS PROXY STATEMENT
This proxy statement sets forth information relating to the solicitation of proxies by the Board of Directors (the “Board”) of Ring Energy, Inc. (the “Company,” or “us“Ring Energy,” or “we” or “our”“our” and “we”) in connection with the solicitationCompany’s Special Meeting of Stockholders (the “Special Meeting”) to be held on behalf of our board of directors of written consents from the holders[•], 2022 at [•] Central Time or any adjournment or postponement of the Company’s Common StockSpecial Meeting. This proxy statement and form of proxy are first being mailed to take action without a shareholders’ meeting.


Our boardstockholders on or about September [•], 2022, to our stockholders of directors is requesting the holdersrecord as of the Company’s Common Stock to consent to the following proposals:


1.

To amend the Company’s Articles of Incorporation as set forth in the Certificate of Amendment attached asAppendix A to the accompanying Consent Solicitation Statement (the “Articles Amendment”).


2.

To approve the Ring Energy, Inc. Long Term Incentive Plan as attached asAppendix B to the accompanying Consent Solicitation Statement (the “Plan Approval”).


3.

To amend the Ring Energy, Inc. Long Term Incentive Plan as set forth in the Amendment to Ring Energy, Inc. Long Term Incentive Plan attached asAppendix C to the accompanying Consent Solicitation Statement (the “Plan Amendment”).


We have established the close of business on January September 1, 2022 (the “Record Date”).

On July 1, 2022, the Company, as buyer, and Stronghold Energy II Operating, LLC, a Delaware limited liability company (“Stronghold OpCo”), and Stronghold Energy II Royalties, LP, a Delaware limited partnership (“Stronghold RoyaltyCo”, together with Stronghold OpCo, “Stronghold”), as seller, entered into a purchase and sale agreement (the “Purchase Agreement”) which was amended on August 4, 2022 to, among other things, add a form of Transition Services Agreement.
On August 31, 2022, the Company closed the Purchase Agreement and acquired (the “Stronghold Acquisition”) interests in oil and gas leases and related property of Stronghold located in the Central Basin Platform of Texas, for a purchase price (the “Purchase Price”) of $167.9 million in cash, as adjusted to the closing date in accordance with the Purchase Agreement, an additional $15.0 million cash payable six months after closing, the assumption of mark-to-market unrealized hedge losses of $26.4 million, and stock consideration consisting of 21,339,986 shares of the Company’s common stock, $0.001 par value per share (“Common Stock”), and 153,176 shares of the Company’s Series A Convertible Preferred Stock, $0.001 par value per share (“Preferred Stock”), as more fully described in “Proposal One — Approval of Conversion of Preferred Stock into Common Stock — Description of Preferred Stock.”
Our Common Stock is traded on the New York Stock Exchange American (the “NYSE American”), and under applicable rules of the NYSE American, the Company cannot issue or sell to Stronghold under the Purchase Agreement shares of Common Stock in excess of 21,339,986 shares (the “Stock Issuance Cap”), which represented approximately 19.9% of the 107,236,111 shares of Common Stock that were outstanding immediately prior to the execution of the Purchase Agreement (and currently represents approximately 16.3% of the 130,581,374 shares of Common Stock outstanding as of September 1, 2022), unless the Company obtains stockholder approval to issue shares in excess of the Stock Issuance Cap, which will be accomplished by conversion of the Preferred Stock into Common Stock. If stockholder approval is obtained, the Company will issue an additional 42,548,903 shares of Common Stock (the “Excess Shares”) upon the conversion of the Preferred Stock pursuant to the terms of a certificate of designation filed with the Nevada Secretary of State (the “Certificate of Designation”) creating the Preferred Stock that was issued at closing, for a total of 63,888,889 shares of Common Stock issued to Stronghold, which we expect to represent approximately 36.9% of the 173,130,277 shares of Common Stock outstanding immediately following such conversion.
STOCKHOLDER APPROVAL OF THE EXCESS SHARES WAS NOT A CONDITION TO CLOSING OF THE STRONGHOLD ACQUISITION.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE PROPOSALS
The following questions and answers address briefly some questions you may have regarding the Special Meeting and the proposals to be considered at the Special Meeting. These questions and answers may not address all questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement.
Q:
Why did I receive these Meeting Materials?
​
A:
We are providing these Meeting Materials in connection with the solicitation by the Board of proxies to be voted at the Special Meeting in connection with the approval of the issuance of Common Stock as required by Rule 712(b) of the NYSE American.
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At the Special Meeting, in accordance with NYSE American Rule 712(b), you will be asked to consider and vote on the Conversion Proposal (as defined below) to approve the issuance of Common Stock upon conversion of the Preferred Stock issued in the Stronghold Acquisition. For further detailed information concerning this matter, see “Proposal One — Approval of Conversion of Preferred Stock into Common Stock”.
As discussed above, because the Common Stock is listed on the NYSE American, the Company is subject to the NYSE American’s rules and regulations. NYSE American Rule 712(b) requires stockholder approval prior to the issuance of Common Stock, or securities convertible into or exercisable for Common Stock, in any transaction or series of transactions if the number of shares of Common Stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of Common Stock outstanding before the issuance of the Common Stock.
Q:
What items of business will be voted on at the Special Meeting?
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A:
The business expected to be voted on at the Special Meeting to consider the approval of the following proposals:
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•
To approve, pursuant to NYSE American Listing Rule 712(b), the issuance of 42,548,903 shares of common stock, par value $0.001 per share, upon conversion of 153,176 shares of Series A Convertible Preferred Stock, par value $0.001 per share (the “Conversion Proposal”);
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•
To authorize the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve and adopt the Conversion Proposal (the “Adjournment Proposal”); and
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•
To consider and transact such other business as may properly come before the Special Meeting and any adjournments or postponements thereof.
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To be properly brought before the Special Meeting, any additional items of business must be presented in accordance with applicable law and the Company’s bylaws. If business is not properly brought before the Special Meeting, there will not be an opportunity to discuss any such matters at the Special Meeting.
Q:
Where and when is the Special Meeting?
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A:
The Special Meeting will be held at [•] a.m. on [•], 2022 at the Company’s office at 1725 Hughes Landing Boulevard, Suite 900, The Woodlands, Texas 77380.
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Q:
Who can attend and vote at the Special Meeting?
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A:
You are entitled to receive notice of and to attend and vote at the Special Meeting, or any postponement or adjournment thereof, if, as of the close of business on September 1, 2022, the Record Date, you were a holder of record of Common Stock.
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As of the Record Date, there were 130,581,374 outstanding shares of Common Stock, each of which is entitled to one vote on each matter to come before the Special Meeting.
If you wish to attend the Special Meeting, you will need to bring a form of personal photo identification in order to be admitted to the Special Meeting. Also, if your shares are held in an account at a broker,

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dealer, commercial bank, trust company, or other nominee (i.e., in “street name”), you will need to bring a copy of your voting instruction card or statement reflecting your share ownership as of the Record Date. “Street name” holders who wish to vote at the Special Meeting will need to obtain a proxy from the broker, dealer, commercial bank, trust company, or other nominee that holds their shares.
Q:
How many shares must be present to conduct business at the Special Meeting?
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A:
A quorum is necessary to hold a valid meeting of Company stockholders. For the proposals to be presented at the Special Meeting, the holders of at least one-third of shares of Common Stock outstanding on the Record Date, must be present at the Special Meeting, in person or by proxy. If you vote — including by Internet, telephone or proxy card — your shares voted will be counted towards the quorum for the Special Meeting. Abstentions are counted as present for the purpose of determining a quorum; broker non-votes may be counted for the purpose of determining the presence of a quorum at the Special Meeting as the record date for determining shareholdersAdjournment Proposal is considered routine.
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Q:
What are my voting choices?
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A:
You may vote “FOR” or “AGAINST” or you may “ABSTAIN” from voting on either Proposal to be voted on at the Special Meeting. Your shares will be voted as you specifically instruct. If you sign your proxy or voting instruction card without giving specific instructions, your shares will be voted in accordance with the recommendations of the Board and in the discretion of the proxy holders on any other matters that properly come before the Special Meeting. If you return your proxy card and “ABSTAIN” from voting, it will have no effect on the Conversion Proposal or the Adjournment Proposal.
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Q:
What vote is required to approve the Proposals?
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A:
If a quorum is present, under Nevada law, the Company’s bylaws and NYSE American rules, the Conversion Proposal and the Adjournment Proposal will be approved if the votes cast in favor of each proposal by the holders of shares of Common Stock represented at the meeting and entitled to submit written consents.

vote exceed the votes cast opposing each proposal. Under the Company’s bylaws, abstentions are counted as present for purposes of determining a quorum but are not counted as shares voted with respect to such proposal, and therefore, if you return your proxy card and “ABSTAIN” from voting, it will have no effect on the proposals. Under the Company’s bylaws, the Special Meeting can also be adjourned by a majority of the Board present, whether or not constituting a quorum.

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Q:

What will happen if the Conversion Proposal is not approved?
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A:
If the Conversion Proposal is not approved, the Excess Shares portion of the consideration of the Stronghold Acquisition will continue to be represented by the Preferred Stock, which will continue to have the terms, rights and privileges, and the Company will continue to have the obligations, described under “Proposal One — Approval of Conversion of Preferred Stock into Common Stock — Description of Preferred Stock.”
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Closing of the Stronghold Acquisition did not require, nor was it conditioned on, stockholder approval of the Conversion Proposal. Therefore, stockholder approval or non-approval of the Conversion Proposal will have no effect on the completed and closed Stronghold Acquisition pursuant to the Purchase Agreement. The Stronghold Acquisition was completed on August 31, 2022, and, at such time, the Company issued the Preferred Stock under the Certificate of Designation that had been filed with the Nevada Secretary of State on August 30, 2022. See “Proposal One — Approval of Conversion of Preferred Stock into Common Stock” for information concerning the Stronghold Acquisition.      
Q:
How does the Board recommend that I vote?
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A:
The Board, after careful consideration, unanimously recommends that our stockholders vote “FOR” the approval of the Conversion Proposal and “FOR” the Adjournment Proposal.
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Q:
How will our directors and executive officers vote on the Proposals?
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A:
Our directors and executive officers have informed us that, as of the date of this proxy statement, they
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intend to vote all of their shares of Common Stock in favor of the approval of each of the Proposals. As of the Record Date, excluding any shares issuable upon the exercise of currently outstanding options of unvested restricted stock units and performance stock units, our directors and current executive officers owned, in the aggregate, shares of Common Stock, representing collectively approximately 1.5% of the votes eligible to be cast at the Special Meeting.
Q:
What do I need to do now?
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A:
We requesturge you to read this proxy statement carefully and to consider how approving the Proposals affects you. Then simply mail your completed, dated and signed proxy card in the enclosed return envelope as soon as possible so that each shareholder complete,your shares can be voted at the Special Meeting. Holders of record may also vote by telephone or the Internet by following the instructions on the accompanying proxy card.
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Q:
What happens if I do not respond or if I respond and fail to indicate my voting preference or if I abstain from voting?
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A:
If you fail to sign, date, and signreturn your proxy card or fail to vote by telephone or Internet as provided on your proxy card, your shares will not be counted towards establishing a quorum for the enclosed written consent formSpecial Meeting, which requires holders representing at least one-third of the outstanding shares of Common Stock to be present in person or by proxy. If you respond and promptly return itdo not indicate your voting preference, we will count your proxy as a vote in favor of the Company’s legal counselapproval of each of the Proposals.
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Q:
If my shares are held in “street name” by my broker, dealer, commercial bank, trust company, or other nominee, will such broker or other nominee vote my shares for me?
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A:
You should instruct your broker or other nominee on how to vote your shares using the instructions provided by the broker or other nominee. Absent specific voting instructions, brokers or other nominees who hold shares of Common Stock in “street name” for customers are prevented by New York Stock Exchange (“NYSE”) rules, which also apply to our Common Stock as shares listed on the NYSE American, from exercising voting discretion in respect of non-routine or contested matters. The Company expects that when the NYSE evaluates the proposals to determine whether each proposal is a routine or non-routine matter, the Conversion Proposal will be evaluated as a non-routine matter and the Adjournment Proposal will be evaluated as a routine matter. Shares not voted by a broker or other nominee because the broker or other nominee does not have instructions or cannot exercise discretionary voting power with respect to any proposals are referred to as “broker non-votes.” Such broker non-votes may be counted for the purpose of determining the presence of a quorum at the Special Meeting because one of the proposals should be deemed routine. It is important that you instruct your broker or other nominee on how to vote your shares of Common Stock held in “street name” in accordance with the voting instructions provided by the broker or other nominee.
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Q:
How do I vote?
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A:
If you are a registered stockholder (i.e., you hold your shares in your own name through our transfer agent, Standard Registrar of Transfer Company Inc., and not through a broker, bank, or other nominee that holds shares for your account in “street name”), you may vote by proxy via the Internet, by telephone, or by mail at 1656 Reunion Avenue, Suite 250, South Jordan, Utah 84095, by email at jamie@vancelaw.us,following the instructions provided on the proxy card for this Special Meeting. Proxies submitted by telephone or by fax at (801) 446-8803.  To be counted, your properly completed written consentthrough the Internet must be received before 5:00by 11:59 p.m. Mountain, Central Time, on January __, 2013, subject[•], 2022 in order to extensionbe counted for purposes of the Special Meeting. Please see the proxy card provided to you for instructions on how to submit your proxy by our boardtelephone or the Internet. Stockholders of directorsrecord who attend the Special Meeting may vote in person by obtaining a ballot from the inspector of elections.
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If you are a beneficial owner of shares (i.e., your shares are held in the name of a brokerage firm, bank or a trustee), you may vote by proxy by following the instructions provided in the vote instruction form or other materials provided to early terminationyou by the brokerage firm, bank, or other nominee that holds your shares. To vote in person at the Special Meeting, you must obtain a legal proxy from the brokerage firm, bank, or other nominee that holds your shares.

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Q:
Can I change my vote after I have mailed my proxy card?
​
A:
Yes. Whether you attend the Special Meeting or not, any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. A proxy may be revoked in writing to the Company’s Corporate Secretary as set forth below, at or before taking of solicitations ifthe vote at the Special Meeting. A written notice of revocation or a majority approval is received.


Failureduly executed proxy, in either case later dated than the prior proxy relating to return the enclosed written consent will have the same effect as a vote against the proposals.  We recommend that all shareholders consent to the proposals, by marking the box entitled “FOR” with respect to the proposal on the enclosed written consent form, and sending the written consent to us.  If you sign and send in the written consent form but do not indicate how you want to vote as to the proposals, your consent formshares, will be treated as a consent “FOR” the proposal.


Consentsfinal vote.

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A proxy may also be revoked by shareholdersattending the Special Meeting and voting in person, although attendance at the Special Meeting will not itself revoke a proxy. Any written notice of revocation or subsequent proxy should be sent so as to be delivered to Travis T. Thomas, Secretary, Ring Energy, Inc., 1725 Hughes Landing Blvd., Suite 900, The Woodlands, Texas 77380 or hand delivered to Mr. Thomas or another Company representative, at or before the taking of the vote at the Special Meeting.
If you hold your shares through a broker, dealer, commercial bank, trust company, or other nominee, you should follow the instructions of such broker or other nominee regarding revocation of proxies.
Q:
Am I entitled to appraisal rights?
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A:
No. You will have no right under Nevada law to exercise dissenter’s rights or seek appraisal of your shares of Common Stock in connection with the proposals.
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Q:
Where can I find the results of the voting?
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A:
We intend to announce preliminary voting results at the Special Meeting and will publish final results through a Current Report on Form 8-K to be filed with the SEC within four business days after the Special Meeting. The Current Report on Form 8-K will be available on the Internet at our website, http://www.ringenergy.com or at the SEC’s website at http://www.sec.gov.
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Q:
Who will pay for the cost of soliciting proxies?
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A:
The Company is paying the costs of the solicitation of proxies. The Company may also reimburse brokerage firms, banks, broker-dealers or other similar organizations for the cost of forwarding proxy materials to beneficial owners. In addition, certain of the Company’s directors, officers and regular employees, without additional compensation, may solicit proxies on the Company’s behalf in person, by telephone, by fax or by electronic mail. See “Proxy Solicitation and Costs” in this proxy statement for further information.
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Q:
What is “householding” and how does it affect me?
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A:
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
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If you receive notice from your broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, beforeyou no longer wish to participate in householding and would prefer to receive separate proxy statements, please notify your broker directly or direct your written request to: Travis T. Thomas, Secretary, Ring Energy, Inc., 1725 Hughes Landing Blvd., Suite 900, The Woodlands, Texas 77380, or by phone at (281) 397-3699.
Q:
Can I obtain an electronic copy of proxy material?
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A:
Yes, this proxy statement, the time that we receiveaccompanying notice of Special Meeting and accept the written consentproxy card are available on the Internet at http://www.ringenergy.com or at the SEC’s website at http://www.sec.gov.
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Q:
What happens if the Special Meeting is adjourned or postponed?
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A:
Although it is not expected, the Special Meeting may be adjourned or postponed for the purpose of
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soliciting additional proxies. Any adjournment or postponement may be made without notice, other than by an announcement made at the Special Meeting, by approval of the holders of a majority of the outstanding shares of Common Stock present in person or represented by proxy at the Special Meeting, if a quorum exists, or by the majority of the Board present at the Special Meeting, whether or not constituting a quorum of the Board. Any signed proxies received by the Company will be voted in favor of an adjournment or postponement in these circumstances. Any adjournment or postponement of the Special Meeting for the purpose of soliciting additional proxies will allow Company stockholders who have already sent in their proxies to revoke them at any time prior to their use.
Q:
Who can help answer my other questions?
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A:
If you have more questions about the proposals or voting, you should contact Travis T. Thomas, Secretary, Ring Energy, Inc., 1725 Hughes Landing Blvd., Suite 900, The Woodlands, Texas 77380, telephone (281) 397-3699.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Any statements in this proxy statement regarding the Stronghold Acquisition, future financial and operating results, future capital structure and liquidity, benefits and synergies of the Stronghold Acquisition, the outcomes of converting or not converting the Preferred Stock, future opportunities for the Company, general business outlook and any other statements about the future expectations, beliefs, goals, plans or prospects of the Board or management of the Company entitled to vote.


By Orderconstitute “forward-looking statements” within the meaning of the BoardSection 27A of Directors

the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as “expects,” “believes,” “intends,” “anticipates,” “plans,” “forecasts,” “projects,” “objective,” “estimates,” “potential,” “possible,” or “probable” or statements that certain actions, events or results “may,” “will,” “should,” or “could” be taken, occur or be achieved. The forward-looking statements include statements about the expected benefits of the Stronghold Acquisition to the Company and its stockholders, the anticipated completion of the Stronghold Acquisition or the timing thereof, the expected future reserves, production, financial position, business strategy, revenues, earnings, costs, capital expenditures and debt levels of the Company, and plans and objectives of management for future operations. Forward-looking statements are based on current expectations and assumptions and analyses made by the Company and its management in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances. Forward-looking statements may include statements about:

•

Denny Nestripke

Vice President







RING ENERGY, INC.

6555 South Lewis Street

Tulsa, OK 74136

(918) 499-3880


CONSENT SOLICITATION STATEMENT


General


This Consent Solicitation Statement

the possible adverse outcomes and consequences if stockholder approval of the conversion of the Preferred Stock into Common Stock is being furnishednot obtained;
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realized oil and natural gas prices;
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the possibility that the anticipated benefits of the Stronghold Acquisition are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the Assets with those of the Company;
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our ability to meet our substantial debt servicing requirements including debt incurred in connection with the solicitationStronghold Acquisition;
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the possibility that the Stronghold Acquisition may be more expensive to implement than anticipated, including as a result of written consentsunexpected factors or events;
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business strategy;
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oil, natural gas and natural gas liquids (“NGLs”) reserves;
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development drilling locations, inventories, projects and programs;
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our ability to replace the reserves that we produce through drilling and property acquisitions;
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financial strategy, liquidity and capital required for our development program and other capital expenditures;
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timing and amount of future production of oil, natural gas and NGLs;
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our hedging strategy results;
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availability of pipeline connections and transportation facilities on economic terms;
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competition, government regulations and political developments;
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our ability to obtain permits and governmental approvals when required;
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legal, governmental regulatory and environmental matters;
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the markets for and our marketing of oil, natural gas and NGLs;
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asset, leasehold or business acquisitions on desired terms;
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costs of developing properties;
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•
general economic conditions and cost inflationary pressures;
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credit markets and interest rates;
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impact of new accounting pronouncements on earnings in future periods;
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estimates of future income taxes and income tax rates;
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our estimates and forecasts of the shareholderstiming, number, profitability and other results of Ring Energy, Inc.,wells we expect to drill and other oil and natural gas activities;
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uncertainty regarding our future operating results and our future revenues and expenses;
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plans, objectives, expectations and intentions contained in this proxy statement that are not historical;
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the duration, spread and severity of COVID-19 and its variants, including the effect of measures to combat the COVID-19 pandemic and its future variants on global oil demand and oil price volatility; and
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the other factors and financial, operational and legal risks or uncertainties described in the Company’s public filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.
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We disclaim any intention or obligation to update or revise any forward-looking statements as a Nevada corporationresult of developments occurring after the date of this document except as required by law. We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, failure to find, acquire or gain access to other discoveries and prospects or to successfully develop and produce from our current discoveries and prospects, geologic risk, drilling and other operating risks, well control risk, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures and the other risks discussed in the section entitled “Risk Factors” in the Company’s filings with the SEC.
Reserve engineering is a process of estimating underground accumulations of oil, natural gas and NGLs that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers or other qualified estimators. In addition, the results of drilling, testing and production activities may justify upward or downward revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil, natural gas and NGLs that are ultimately recovered.
Should one or more of the risks or uncertainties described herein occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this proxy statement are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. All forward-looking statements speak only as of the date of this proxy statement. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this proxy statement.

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PROPOSAL ONE — APPROVAL OF CONVERSION OF PREFERRED STOCK INTO COMMON STOCK
On July 1, 2022, the Company, as buyer, and Stronghold, as seller, entered into the Purchase Agreement, which was amended on August 4, 2022 to add a Transition Services Agreement. On August 31, 2022, the Company closed the Purchase Agreement and acquired (the “Company” or “us” or “we” or “our”“Stronghold Acquisition”) with regardinterests in oil and gas leases and related property of Stronghold located in the Central Basin Platform of Texas, for a purchase price (the “Purchase Price”) of $167.9 million in cash, as adjusted to the following proposals:


1.

To amendclosing date in accordance with the Purchase Agreement, an additional $15.0 million cash payable six months after closing, the assumption of mark-to-market and unrealized hedge losses of $26.4 million, and stock consideration consisting of 21,339,986 shares of the Company’s Articlescommon stock, $0.001 par value per share (“Common Stock”) and 153,176 shares of Incorporationthe Company’s Series A Convertible Preferred Stock, $0.001 par value per share (“Preferred Stock”), as more fully described below in “— Description of Preferred Stock.”

As indicated above under “About this Proxy Statement”, our Common Stock is traded on the NYSE American, and under applicable rules of the exchange, the Company did not issue or sell to Stronghold under the Purchase Agreement shares of Common Stock in excess of 21,339,986 shares (the “Stock Issuance Cap”), which represented approximately 19.9% of the 107,236,111 shares of our Common Stock that were outstanding immediately prior to the execution of the Purchase Agreement (and currently represents approximately 16.3% of the 130,581,374 shares of Common Stock issued and outstanding as of September 1, 2022). If the Company is able to obtain stockholder approval of the conversion of its outstanding Preferred Stock into Common Stock, it will issue an additional 42,548,903 Excess Shares upon the conversion of the Preferred Stock pursuant to the terms of the Certificate of Designation filed with the Nevada Secretary of State creating the Preferred Stock that was issued at closing, for a total of 63,888,889 shares of Common Stock issued to Stronghold, which we expect to represent approximately 36.9% of the 173,130,277 shares of Common Stock outstanding immediately following such conversion.
Pursuant to the Purchase Agreement, the Company is calling the Special Meeting to submit the Conversion Proposal for consideration, and in connection therewith, the Company has filed this proxy statement with the SEC.
The Stronghold Acquisition was completed and closed on August 31, 2022, after the satisfaction of several customary closing conditions as set forth in the Purchase Agreement. STOCKHOLDER APPROVAL OF THE ISSUANCE OF THE EXCESS SHARES WAS NOT A CONDITION TO THE CLOSING OF THE STRONGHOLD ACQUISITION. The structure for the possible issuance of the Excess Shares through automatic conversion of the Preferred Stock was agreed to by the parties to the Purchase Agreement because of uncertainties between the timing of the closing and the ability to obtain timely stockholder action on the Conversion Proposal.
The Board believes that the Conversion Proposal is in the best interests of the Company and its stockholders and, therefore, unanimously recommends that you vote “FOR” the Conversion Proposal.
Consequences of Not Approving the Conversion Proposal
If stockholder approval of the Conversion Proposal is received, the Company will issue 42,548,903 shares of Common Stock upon the conversion of the Preferred Stock (subject to adjustment, including certain increases including stock splits, stock dividends, rights offerings and similar changes over time in the number of shares of Common Stock into which the Preferred Stock will convert), which will occur automatically upon such approval.
If a stockholder vote does not approve the conversion of the Preferred Stock into shares of Common Stock, the Preferred Stock will remain outstanding and will continue to have all the powers, rights and preferences, and the Company will continue to have the obligations, discussed below. If stockholder approval of the Conversion Proposal is not received pursuant to this proxy statement, the Company will be required to seek further stockholder votes seeking approval of the conversion of the Preferred Stock into shares of Common Stock. If the Preferred Stock has not automatically converted into Common Stock on or before January 31, 2023, then each holder of Preferred Stock will be entitled to receive dividends at an annual rate of 8.0% of the initial liquidation preference per share from the date of issuance. If a cash dividend is not

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declared and paid on any dividend payment date, then the liquidation preference per share of Preferred Stock will be increased by the amount of the unpaid dividend. Therefore, in the event that the Company continues to seek approval for the conversion of the Preferred Stock after January 31, 2023, then the Company would be required to solicit stockholder approval for an increasingly larger number of shares of Common Stock into which the Preferred Stock will convert due to any increases to the liquidation preference per share of Preferred Stock.
The Board unanimously recommends approval of the Conversion Proposal primarily because (i) the Company’s capital structure would be simplified with Common Stock as its only class of outstanding equity securities; (ii) there would be no preferential distribution of 8.0% per annum payable to Preferred Stock holders; (iii) there would be no liquidation preference in favor of Preferred Stock holders; (iv) the Company would avoid its obligation to mandatorily redeem the Preferred Stock for cash 61 months after closing; and (v) the Preferred Stock holders would not have voting rights on extraordinary corporate events, all as described below in this proxy statement.
Description of Preferred Stock Certificate of Amendment attached asAppendix ADesignation
The powers, preferences, rights, qualifications, limitations and restrictions applicable to the accompanying Consent Solicitation Statement (the “Articles Amendment”).


2.

To approve the Ring Energy, Inc. Long Term Incentive Plan as attached asAppendix B to the accompanying Consent Solicitation Statement (the “Plan Approval”).


3.

To amend the Ring Energy, Inc. Long Term Incentive Plan asPreferred Stock is set forth in the AmendmentCompany’s Certificate of Designation of the Series A Convertible Preferred Stock (the “Certificate of Designation”). The Certificate of Designation was filed with the Nevada Secretary of State on August 30, 2022.

Rank
The Preferred Stock ranks as to Ring Energy, Inc. Long Term Incentive Plan attacheddividends or distributions of assets upon the Company’s liquidation, dissolution or winding up, whether voluntarily or involuntarily, asAppendix C follows:
•
senior to the accompanying Consent Solicitation Statement (the “Plan Amendment”).


This Consent Solicitation Statement contains important information for you to consider when deciding how to vote on these matters.  Please read it carefully.


Our board of directors has approved the proposals and has chosen to seek to obtain shareholder approval of the proposals by written consent, rather than by calling a special meeting of shareholders, in order to eliminate the costs and management time involved in holding a special meeting, and in order to effect the proposed corporate action as quickly as possible.  Written consents are being solicited from all of our shareholders pursuant to Section 78.320(2) of the Nevada Revised Statutes.


Voting materials, which include this Consent Solicitation Statement and a written consent form, are being mailed to all shareholders on or about January __, 2013.  Our board of directors has set the close of business on January 2, 2013, as the record date for the determination of shareholders entitled to actCommon Stock with respect to dividends and with respect to distributions upon a deemed dissolution, liquidation or winding-up of the Company;

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senior to any class or series of the Company’s capital stock after the Preferred Stock is created specifically ranking by its terms junior to the Preferred Stock;
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pari passu with any class or series of the Company’s capital stock after the Preferred Stock is created specifically ranking by its terms on a parity with the Preferred Stock; and
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junior to any class or series of the Company’s capital stock after the Preferred Stock is created specifically ranking by its terms senior to the Preferred Stock.
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Voting Rights
The holders of shares of Preferred Stock generally have no voting rights, except as required by law, and except that the consent action (the “Record Date”).  As of the Record Date, the Company had 14,166,011 sharesmajority of Common Stock outstanding of record, held by approximately 251 registered holders of record.


How to Submit Consents; Expiration Date


Shareholders of record who desire to consent to the proposals may do so by delivering the applicable written consent to us by hand, mail, email, facsimileoutstanding Preferred Stock is required to: (i) create, authorize or overnight courier, in accordance with the instructions contained in the written consent.  If your shares are held in street name, voting will depend on the voting processes of your broker, bank, or other holder of record.  Therefore, we recommend that you follow the voting instructions in the materials you receive directly from the holder of record.


If the written consent is properly completed and signed, the shareholder will be deemed to have consented to the proposals.  Failure to return the enclosed written consent form will have the same effect as a vote against approval of the proposals.


Written consents by the shareholder(s) must be executed in exactly the same manner as the name(s) appear(s) on the stock certificates.  If stock certificates to which a written consent relates are held of record by two or more joint holders, all such holders must sign the written consent.  If a signature is by a trustee, executor, administrator, guardian, proxy, attorney-in-fact, officer of a corporation or other record holder acting in a fiduciary or representative capacity, such person should so indicate when signing and must submit proper evidence satisfactory to us of such person’s authority so to act.  If stock certificates are registered in different names, separate written consents must be executed covering each form of registration.




FOR A WRITTEN CONSENT TO BE VALID, A SHAREHOLDER MUST COMPLETE, SIGN, DATE AND DELIVER THE WRITTEN CONSENT (OR PHOTOCOPY THEREOF) FOR SUCH HOLDER’S SHARES TO THE COMPANY’S LEGAL COUNSEL.  SUCH WRITTEN CONSENT MAY BE DELIVERED TO THE COMPANY’S LEGAL COUNSEL BY HAND, MAIL, EMAIL, FACSIMILE OR OVERNIGHT COURIER.


All written consents that are properly completed, signed and delivered to our legal counsel before the Expiration Date (as defined below), subject to extension by our board of directors, and not revoked before our acceptance of the written consents, will be accepted.


The term “Expiration Date” means 5:00 p.m. Mountain Time, on January __, 2013, unless the Requisite Consents are received before such date, in which case this solicitation will expire on the date that such Requisite Consents are obtained, and such earlier date shall be the Expiration Date.


Final results of this solicitation of written consents will be published in a Form 8-K filed with the SEC after the Expiration Date.


Notwithstanding anything to the contrary set forth in this Consent Solicitation Statement, we reserve the right, atissue any time before the Expiration Date, to amend or terminate the solicitation, or to delay accepting written consents.


If you have any questions about the consent solicitation or how to vote or revoke your written consent, or if you should need additional copies of this Consent Solicitation Statement or voting materials, please contact Lloyd Tim Rochford, a directorequity securities of the Company at (760) 346-5961.


Revocation of Consents


Written consents may be revoked or withdrawn by the shareholders at any time before 5:00 p.m. Mountain Time on the Expiration Date.  To be effective, a written, facsimile, or email revocation or withdrawal of the written consent must be received by our legal counsel before such time and addressed as follows:  Ring Energy, Inc., Attn:  Legal Counsel, 1656 Reunion Avenue, Suite 250, South Jordan, Utah 84095; by email at jamie@vancelaw.us, or by facsimile at (801) 446-8803.  A notice of revocation or withdrawal must specify the shareholder’s name and the number of shares being withdrawn.  After the Expiration Date, all written consents previously executed and delivered and not revoked will become irrevocable.


Solicitation of Consents


Our board of directors is sending you this Consent Solicitation Statementother than in connection with its solicitationissuances of consents to approve the Articles Amendment, Plan Approval, and Plan Amendment.  Officers and directors of the Company holding approximately 34% of the voting control of the Company have indicated their intent to provide consents for approval of the items set forth herein.  Certain directors, officers and employees of our Company may solicit written consents by mail, email, telephone, facsimile or in person.  Our Company will pay for the costs of solicitation.  We expect to pay the reasonable expenses of brokers, nominees and similar record holders in mailing voting materials to beneficial owners of our common stock.


PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION


A copy of the Certificate of Amendment is attached asAppendix A to this Information Statement.


General


On December 27, 2012, the Board of Directors, by unanimous written consent, approved an amendment to the Articles of Incorporation of the Company increasing the total common shares authorized from 75,000,000 to 150,000,000, par value $.001 per share.  An amendment to the Articles of Incorporation of the Company was also approved by the Board of Directors that authorized the issuance of 50,000,000 preferred shares, par value $.001 per share.





Further, the Board of Directors approved the Article numbered “TENTH” of the Articles of Incorporation to be amended in its entirety to read as follows:  


The authority to adopt, amend or repeal bylaws is reserved exclusively to the Board of Directors.


Lastly, the Board of Directors approved the Article numbered “TWELFTH” of the Articles of Incorporation to be amended in its entirety to read as follows:


Except as otherwise provided by statute a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that:


a)

The director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and


b)

The breach of those duties involved intentional misconduct, fraud or a knowing violation of law.


Purpose for Increase of Authorized Shares


The Board of Directors approved the Articles of Amendment to furtherjunior securities under the Company’s best interest to have additional authorized but unissued shares of common shares availableequity incentive plans as in order to (a) provide flexibility for future corporate action; (b) raise additional capital by issuing additional shares of Common Stock or granting warrants for the future purchase of Common Stock; (c) grant additional options to purchase Common Stock to attract qualified employees and consultants; and (d) issue additional shares of common stock or securities convertible into Common Stock in connection with strategic corporate transactions, acquisitions, and other business arrangements and corporate purposes, as desirable to avoid repeated separate amendments to our Articles of Incorporation and the delay and expense incurred in amending the Articles of Incorporation.  The Company intends to assess its need to issue securities for the corporate purposes described above and we believe that we need to be in a position to take advantage of opportunities when they arise or when we have a need.  The Board of Directors believes that the currently available unissued shares do not provide sufficient flexibility for corporate action in the future.


Currently, there is no plan to issue any securities for the corporate purposes described above.  In the event any securities are issued in the future, shareholders may suffer dilution to their ownership of the Companyeffect at the time of the issuance of the Preferred Stock; (ii) redeem, acquire or make a Company tender offer for any equity securities to the extent that assets of equal value as the fair market value of the shares being issued is not received.  No additional corporate action is needed to issue any additional securities.  The Company may even issue securities as a defensive mechanism in order to attempt to stop a hostile takeover by another company although there is no plan to do so at this time.


Purpose for Authorizing Preferred Shares


The Board of Directors approved the Articles Amendment to further the Company’s best interest to have authorized but unissued shares of preferred shares available in order to (a) provide flexibility for future corporate action; (b) further the Company’s best interest to have preferred shares in order to raise additional capital and to be used for corporate opportunities; and (c) issue shares of preferred stock or securities convertible into Common Stock(other than in connection with strategic corporate transactions, acquisitions, and other business arrangements and corporate purposes,repurchases by the Company in connection with its equity incentive plans); (iii) generally declare or pay dividends or direct or indirect distributions (other than distributions on the Preferred Stock); (iv) generally increase or decrease the size of the Board except as desirable to avoid repeated separate amendments to our Articles of Incorporation and the delay and expense incurred in amending the Articles of Incorporation.  The Company intends to assess its need to issue preferred shares for the corporate purposes described above and we believe that we need to be in a position to take advantage of opportunities when they arise or when we have a need.  The Company currently has no preferred shares authorized in its Articles of Incorporation.


Currently, there is no plan to issue any preferred shares for the corporate purposes described above.  In the event any preferred shares are issuedset forth in the future, shareholders may suffer dilutionPurchase Agreement or any ancillary document thereto; (v) announce, authorize or enter into any agreement related to their ownershipa material transaction (material acquisitions, mergers, tender offers, business combinations and similar transactions) or change of control of the Company at the time of the issuance of the preferred shares to the extent that assets of equal value as the fair market value of the shares being issued is not received.  No additional corporate action is needed to issue any preferred shares.  The Company may even issue preferred shares as a defensive mechanism in order to attempt to stop a hostile takeover by another company; there is no plan to do this at this time.




Purpose for Amendment to Tenth Article


As currently in effect the Tenth Article ofCompany; (vi) amend, repeal, modify, or alter the Company’s Articles of Incorporation reads as follows:


In furtherance and notor Bylaws in limitationany manner that adversely affects any rights of the holders of Preferred Stock; and (vii) alter or change adversely the powers, conferred by the statute, the Board of Directors is expressly authorized:


a)

Subjectpreferences or rights given to the By-Laws, if any, adopted by the Stockholders, to make,Preferred Stock or alter or amend the By-LawsCertificate of the corporation.


b)

To fix the amount to be reserved as working capital overDesignation.

Distributions
When and above its capital stock paid in; to authorize and to cause to be executed, mortgages and liens upon the real and personal property of this corporation.


c)

By resolution passed by a majority of the whole Board, to designate one (1) or more committees, each committee to consist of one or more of the Directors of the Corporation, which, to the extent provided in the resolution, or in the By-Laws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation.  Such committee, or committees, shall have such name, or names as may be stated in the By-l.aws of the corporation, or as may be determined from time to time by resolution adoptedif declared by the Board, the Preferred Stock will be entitled to preferred distributions at a rate of Directors.


d)

When and as authorized by the affirmative vote8.0% per annum of the Stockholders holding stock entitling themliquidation preference per share, which is initially $1,000 per share, plus any


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accrued and unpaid distributions through the date of conversion, payable each calendar quarter. To the extent distributions are not declared and paid, then on each distribution date the unpaid distribution per share will be added to exercise at least a majoritythe per share liquidation preference described below and used for the purpose of the voting power given at a Stockholders meeting called form that purpose,accrual of future distributions, the determination of the liquidation preference and determination of the number of shares of Common Stock issuable on conversion. Notwithstanding the foregoing, no distributions will be paid on the Preferred Stock if it is converted into Common Stock on or when authorized by the written consent ofbefore January 31, 2023.
In addition, the holders of at least a majorityPreferred Stock are entitled to receive, and the Company is required to pay, dividends on shares of the voting stock issuedPreferred Stock equal (on an as if converted to Common Stock basis) to and outstanding,in the Board of Directors shall have power and authority at any meeting to sell, lease or exchange allsame form as dividends actually paid on shares of the propertyCommon Stock when, as and assetsif such dividends are paid on shares of the corporation, including its good willCommon Stock.
Conversion and its corporate franchises, uponLimitations
The Preferred Stock may not be converted into Common Stock until such terms and conditionstime as its Boardstockholder approval is received, which is defined as the date requisite approval from holders of Directors deemed expedient and for the best interests of the corporation.


The purpose of the proposed amendment to the Tenth Article of the Articles of Incorporationcapital stock of the Company is to indicatereceived as required at law or under the Company’s desire, in conformity with statutory provisions, thatapplicable securities exchange rules (currently the power to amend the Company’s Bylaws be reserved exclusively to the BoardNYSE American Stock Exchange). Upon receiving stockholder approval, each share of Directors.  By granting the Board of Directors exclusive authority to amend the Company’s Bylaws, the Company believes that the Bylawsissued Preferred Stock will be more flexible in conforming to the continuing needs of a growing  Company.  The purpose of removing b), c), and d) from the Tenth Article is that the provisions either (i) are covered by statute or (ii) no longer apply to the Company.


Purpose for Amendment to Twelfth Article


As currently in effect the Twelfth Article of the Company’s Articles of Incorporation reads as follows:


No Director or Officer of the corporation shall be personally liable to the corporation or any of its stockholders for damages for breach of fiduciary duty as a Director or Officer involving any act or omission of any such Director or Officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a Director of Officer  (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law, or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes.  Any repeal or modification of this Article by the Stockholders of the corporation shall be prospective only, and shall not adversely affect any limitations on the personal liability of a Director of Officer of the corporation for acts or omissions prior to such repeal or modification.


The purpose of the proposed amendment to the Twelfth Article of the Articles of Incorporation of the Company is to keep the Articles of Incorporation consistent with current statutory provisions in regard to the limitation of monetary liability of the Company’s directors and officers as allowed by Nevada State law.





Interest of Certain Persons in the Articles Amendment


No one who has been a Company director or executive officer since the beginning of our last fiscal year has any substantial interest, direct or indirect, by security holdings or otherwise, in the proposed Articles Amendment that is not shared by all other holders of the Company’s Common Stock.


PROPOSAL TO APPROVE RING ENERGY, INC. LONG TERM INCENTIVE PLAN


Description of Our Long Term Incentive Plan


The Ring Energy, Inc. Long Term Incentive Plan (the “Plan”) was in existence with Stanford Energy, Inc. (“Stanford”) and was adopted by the Board of Directors on June 27, 2012, and assumed by the Company upon the acquisition of Stanford.  The following is a summary of the material terms of the Plan.  A copy of the Plan is attached asAppendix B to this Information Statement.


Shares Available


Our Plan currently authorizes 2,500,000 shares of our common stock for issuance under the Plan.  As indicated above, if the requisite shareholder approval is gained for the Plan Amendment, the Plan will authorize 5,000,000 shares of our common stock for issuance under the Plan.  If any shares of Stock subject to an Award are forfeited or if any Award based on shares of Stock is otherwise terminated without issuance of such shares of Stock or other consideration in lieu of such shares of Stock, the shares of Stock subject to such Award shall to the extent of such forfeiture or termination, again be available for Awards under the Plan if no participant shall have received any benefits of ownership in respect thereof  The shares to be delivered under the Plan shall be made available from (a) authorized but unissued shares of common stock, (b) common stock held in the treasury of the Corporation, or (c) previously issued shares of common stock reacquired by the Company, including shares purchased on the open market, in each situation as the Board of Directors or the Compensation Committee may determine from time to time at its sole option.


Administration


The Committee shall administer the Plan with respect to all eligible individuals or may delegate all or part of its duties under the Plan to a subcommittee or any executive officer of the Corporation, subject in each case to such conditions and limitations as the Board of Directors may establish.  Under the Plan, “Committee” can be either the Board of Directors or a committee approved by the Board of Directors.


Eligibility


Awards may be granted pursuant to the Plan only to persons who are eligible individuals at the time of the grant thereof or in connection with the severance or retirement of Eligible Individuals.  Under the Plan, “Eligible Individuals” means (a) employees, (b) non-employee Directors and (c) any other person that the Committee designates as eligible for an Award (other than for Incentive Options) because the Person performs bona fide consulting or advisory services for the Corporation or any of its Subsidiaries (other than services in connection with the offer or sale of securities in a capital raising transaction).


Stock Options


Under the Plan, the plan administrator is authorized to grant stock options.  Stock options may be either designated as non-qualified stock options or incentive stock options.  Incentive stock options, which are intended to meet the requirements of Section 422 of the Internal Revenue Code such that a participant can receive potentially favorable tax treatment, may only be granted to employees.  Therefore, any stock option granted to consultants and non-employee directors are non-qualified stock options.


Options granted under the Plan become exercisable at such times as may be specified by the plan administrator.  In general, options granted to participants become exercisable in five equal annual installments, subject to the optionee’s continued employment or service with our company.  However, the aggregate value (determined as of the grant date) of the shares subject to incentive stock options that may become exercisable by a participant in any year may not exceed $100,000.




Each option will be exercisable on such date or dates, during such period, and forautomatically converted into such number of shares of Common Stock as shall be determined by dividing (i) the plan administrator onliquidation preference (described below) as of the day onconversion date by (ii) the conversion price which is initially $3.60 per share (subject to adjustment for stock splits and distributions, recapitalizations, exchanges and similar actions), such stock optioncalculation, as so adjusted from time to time, the “Conversion Rate”. The initial Conversion Rate is granted and set forth in277.7778 shares of Common Stock for each share of Preferred Stock.

Liquidation Preference
Upon a liquidation event, the option agreement with respectholders of the Preferred Stock are entitled to such stock option; provided, howevera “liquidation preference” of $1,000 per share plus any unpaid distributions noted above. A “liquidation event” means (i) any voluntary or involuntary liquidation, dissolution or winding-up of the maximum term of options granted underCompany or (ii) the Plan is ten years.


Restricted Stock


Under the Plan, the plan administrator is also authorized to make awards of restricted stock.  Before the endconsummation of a restricted period and/change of control (which generally means (x) the acquisition by a person of more than 50% of the combined voting power of the Company); (y) approval of the sale or lapse of other restrictions establisheddisposition by the plan administrator, sharesCompany of substantially all the assets of the Company; or (z) approval by the stockholders of the Company of any merger, consolidation or statutory share exchanges as a result of the Company stockholders immediately prior to the effective date of such action have less than 50% percent of the voting power in selection of directors of the surviving corporation.

If, on a fully converted basis, the amount that the holders of the Preferred Stock would receive is greater than their liquidation preference, then instead they are to receive the “as-converted” amount meaning the amount such holders would have received as restricted stock will contain a legend restricting their transfer, and may be forfeited inif the event of termination of employment or upon the failurePreferred Stock had been converted to achieve other conditions set forth in the award agreement.


An award of restricted stock will be evidenced by a written agreement between us and the participant.  The award agreement will specify the number of shares of Common Stock subject to the award, the nature and/or length of the restrictions, the conditions that will result in the automatic and complete forfeiture of the shares and the time and manner in which the restrictions will lapse, subject to the participant’s continued employment by us, and any other terms and conditions the plan administrator imposes consistent with the provisions of the Plan. Upon the lapse of the restrictions, any legends on the shares of common stock subject to the award willthey would be re-issued to the participant without such legend.


The plan administrator may impose such restrictions or conditions, to the vesting of such shares as it, in its absolute discretion, deems appropriate.  Prior to the vesting of a share of restricted stock granted under the Plan, no transfer of a participant’s rights to such share, whether voluntary or involuntary, by operation of law or otherwise, will vest the transferee with any interest, or right in, or with respect to, such share, but immediately upon any attempt to transfer such rights, such share, and all the rights related thereto, will be forfeited by the participant and the transfer will be of no force or effect; provided, however, that the plan administrator may, in its sole and absolute discretion, vest in the participant all or any portion of shares of restricted stock which would otherwise be forfeited.


Fair Market Value


Under the Plan, “Fair Market Value” means, for a particular day, the value determined in good faith by the plan administrator, which determination shall be conclusive for all purposes of the Plan.  For purposes of valuing incentive options, the fair market value of stock:  (i) shall be determined without regard to any restriction other than one that, by its terms, will never lapse; and (ii) will be determinedentitled as of the timeliquidation event.

The Certificate of Designation provides that when there is a liquidation event where the option with respectproceeds include both cash and property, the holders of Preferred Stock are to such stockreceive cash to the extent possible.
Redemption
If the Preferred Stock has not been converted prior to September 30, 2027, the date that is granted.


Transferability Restrictions


Notwithstanding any limitation61 months following the closing of the Stronghold Acquisition on a holder’s rightAugust 31, 2022, to transfer an award, the plan administrator may (in its sole discretion) permit a holder to transfer an award, or may causeextent legally permissible, the Company must redeem all outstanding shares of Preferred Stock in cash at the greater of the liquidation preference or the market price of Common Stock that each holder would receive if such holder had fully converted into shares of Common Stock on the redemption date.

Stockholders should carefully review the Certificate of Designation, incorporated by reference herein, that will govern the powers, preferences, rights, qualifications, limitations and restrictions applicable to grant an award that otherwise would be grantedthe Preferred Stock. If stockholder approval of the Conversion Proposal is not obtained pursuant to an eligible individual, inthe solicitation under this proxy statement, the Company intends to seek approval through additional proxy solicitations for the automatic conversion of the Preferred Stock into Common Stock.

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Other Provisions
So long as any shares of Preferred Stock remain outstanding, we have agreed not to take any of the following circumstances:  (a) pursuant to a qualified domestic relations order, (b) to a trust established foractions without the benefit of the eligible individualaffirmative vote or one or more of the children, grandchildren or spouse of the eligible individual; (c) to a limited partnership or limited liability company in which all the interests are held by the eligible individual and that person’s children, grandchildren or spouse; or (d) to another person in circumstances that the plan administrator believes will result in the award continuing to provide an incentive for the eligible individual to remain in the service of the Company or its subsidiaries and apply his or her best efforts for the benefit of the Company or its subsidiaries.  If the plan administrator determines to allow such transfers or issuances of awards, any holder or eligible individual desiring such transfers or issuances shall make application therefor in the manner and time that the plan administrator specifies and shall comply with such other requirements as the plan administrator may require to assure compliance with all applicable laws, including securities laws, and to assure fulfillment of the purposes of this Plan.  The plan administrator shall not authorize any such transfer or issuance if it may not be made in compliance with all applicable federal and state securities laws.  The granting of permission for such an issuance or transfer shall not obligate the Company to register the shares of stock to be issued under the applicable award.




Termination and Amendments to the Plan


The Board of Directors may (insofar as permitted by law and applicable regulations), with respect to any shares which, at the time, are not subject to awards, suspend or discontinue the Plan or revise or amend it in any respect whatsoever, and may amend any provision of the Plan or any award agreement to make the Plan or the award agreement, or both, comply with Section 16(b) of the Exchange Act and the exemptions therefrom, the Internal Revenue Code, as amended (the “Code”), the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the regulations promulgated under the Code or ERISA, or any other law, rule or regulation that may affect the Plan.  The Board of Directors may also amend, modify, suspend or terminate the Plan for the purpose of meeting or addressing any changes in other legal requirements applicable to the Company or the Plan or for any other purpose permitted by law.  The Plan may not be amended without the consent of the holders of a majority of the shares of commonPreferred Stock voting separately as a single class:

(a)
create, authorize (including by way of reclassification, merger, consolidation, subdivision or other similar reorganization) or issue any of our equity securities except with respect to certain employee plans, including additional shares of Series A Preferred Stock;
​
(b)
redeem, acquire, engage in a tender offer (other than responding to a third-party tender offer as required by applicable law) or otherwise purchase any of our equity securities except with respect to certain employee plans;
​
(c)
declare or pay, set apart for payment in respect of or make any direct or indirect distribution or distribution (whether in cash, securities or other property) in respect of any equity securities, other than with respect to the Preferred Stock;
​
(d)
amend, repeal, modify or alter our Articles of Incorporation or Bylaws so as to affect adversely the rights, preferences, privileges or voting or consent rights of the Series A Preferred Stock or the holders of the Series A Preferred Stock;
​
(e)
announce, authorize or enter into any agreement related to or consummate a material transaction, including (but not limited to) any change of control as such terms are defined in the Certificate of Designation; or
​
(f)
increase or decrease the size of the Board other than as set forth in the Purchase Agreement or any ancillary documents thereto.
​

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PROPOSAL TWO — ADJOURNMENT
The Company’s stockholders are being asked to consider and vote on a proposal to adjourn or postpone the Special Meeting, if necessary, to solicit additional proxies. The Board believes this proposal to be in the best interests of the Company’s stockholders because it gives the Company flexibility to solicit the vote of additional holders of Common Stock to vote.
The Board recommends that stockholders vote “FOR” Proposal Two to adjourn or postpone the Special Meeting, if necessary, to solicit additional proxies.
THE RECENT STRONGHOLD ACQUISITION
General
Even though stockholder approval for completion and closing the Stronghold Acquisition was not required, the Company is providing the following information to provide context and perspective for Company stockholders in their consideration of the Conversion Proposal.
Ring Energy, Inc.
Ring Energy, Inc., a Nevada corporation (the “Company,” “we,” “us” and “our”), is a growth-oriented independent oil and natural gas development and production company based in The Woodlands, Texas. The Company’s operations are all in the upstream segment of the oil and natural gas industry and all its properties are onshore in the United States. The Company’s primary drilling operations target the oil and liquids rich producing formations in the Northwest Shelf, the Central Basin Platform, and the Delaware Basin all of which are part of the Permian Basin in Texas and New Mexico. Our Common Stock is listed on the NYSE American under the trading symbol “REI.” The Company’s principal offices are located at 1725 Hughes Landing Blvd, Suite 900, The Woodlands, Texas 77380, and its telephone number is (281) 397-3699.
Stronghold Energy II Operating, LLC
Stronghold II Royalties, LP
The seller parties under the Purchase Agreement are Stronghold Energy II Operating, LLC, a Delaware limited liability company, and Stronghold II Royalties, LP, a Delaware limited partnership, collectively both companies are referred to herein as “Stronghold”. The majority owners of Stronghold are certain investment funds affiliated with Warburg Pincus LLC (“Warburg”). The remaining ownership of Stronghold consists of current and former members of management of Stronghold as well as “friends and family” and an independent director. Stronghold was formed to acquire, develop and hold oil and gas assets primarily in the Permian Basin of Texas. Stronghold’s principal executive offices are located at 508 West Wall Street, Suite 550, Midland, Texas 79701, and its telephone number is (432) 253-9150.
SUMMARY OF THE RECENT STRONGHOLD ACQUISITION
General
On July 1, 2022, the Company, as buyer, and Stronghold, as seller, entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the Company acquired (the “Stronghold Acquisition”) interests in oil and gas leases and related property of Stronghold located in the Central Basin Platform of Texas, for a purchase price of approximately $465.0 million (as determined on the execution date of the Purchase Agreement), of which $215.0 million was to be in cash (with $15.0 million being deferred for six months from closing), the assumption of mark-to-market unrealized hedge losses of $20.0 million and stock consideration of 21,339,986 shares of the Company’s Common Stock and 153,176 shares of newly created Series A Convertible Preferred Stock (“Preferred Stock”). The Purchase Price was subject to customary purchase price adjustments after the execution date but before the closing using an effective date of June 1, 2022. On July 5, 2022, in connection with the Purchase Agreement, the Company deposited $46.5 million in cash into a third-party escrow account as a deposit pursuant to the Purchase Agreement (the “Deposit Amount”), which was credited against the purchase price upon closing of the Stronghold Acquisition. At the closing of the Stronghold Acquisition therefore the cash portion of the consideration paid by the Company was

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$167.9 million with an additional $15.0 million being deferred for six months after closing and the assumption of mark-to-market unrealized hedge losses of $26.4 million. Also at the closing: (i) $8,250,000 of cash and (ii) 23,249 shares of Preferred Stock were deposited or remained in the third-party escrow account for indemnity obligations, if any, of Stronghold for a limited period of time. The cash, deferred cash, hedge loss assumption and stock are collectively referred to as the “Stronghold Acquisition Consideration.”
Background of the Stronghold Acquisition
The Company has reviewed several potential strategic and accretive acquisitions that could improve its balance sheet, oil and gas reserves and revenue as part of its growth strategy since its existing management team joined the Company in the fourth quarter of 2020. The Company hired Raymond James & Associates, Inc. (“Raymond James”) and Truist Securities, Inc. (“Truist”) as buy-side advisors during the first quarter of 2021 to assist it to identify, evaluate, and pursue potential acquisition opportunities. Stronghold was one of several companies identified by both advisors as a potential acquisition candidate. After completing an internal evaluation of Stronghold using public information, the Company and the advisors agreed to advance its pursuit of a potential transaction with Stronghold.
In October 2021, Jim Warren, a representative of Truist, contacted David Habachy, who at the time was a representative of Warburg Pincus LLC, the principal member/owner of Stronghold. Later that month, Mr. Habachy introduced Paul McKinney, CEO and Chairman of the Company, to Steve and Caleb Weatherl, members and officers of Stronghold. On October 19, 2021, the Company and Stronghold entered into a confidentiality agreement.
Throughout the months of November and December 2021, the Company’s representatives including the A&D team and the Executive Team evaluated Stronghold’s oil and gas assets, operations and future prospects and received input and analyses from its two financial advisors.
In December 2021, the Company was advised that Stronghold intended to engage a major investment bank to conduct a sales process regarding Stronghold’s assets. On January 18, 2022, the Company submitted a letter of intent to Stronghold regarding the purchase of Stronghold’s assets. Stronghold rejected the letter of intent on January 24, 2022, because the letter included an inadequate purchase price.
Beginning in February 2022, Stronghold’s investment bank instituted a sales process to invite offers from multiple potential bidders. During the entire month of April 2022, the Company engaged in discussions and then outstandingnegotiations with several commercial banks regarding their potential participation in the financing of the Stronghold acquisition. On May 4 and May 5, 2022, at a regularly scheduled Board meeting of the Company, the Company’s directors were updated on the management team’s desire to increase materiallysubmit an offer in the aggregateStronghold bidding process. After being updated by email on May 12, 2022, the Board authorized management to submit a non-binding letter of intent in the Stronghold sales process with a proposed purchase price of $460.0 million consisting of $210.0 million in cash and $250.0 million in the Company’s Common Stock. On May 17, 2022, the Company submitted a formal bid for Stronghold’s assets pursuant to the sales process. Shortly thereafter, the Company was advised that it was among the top bidders and it should submit its best and final offer for the Stronghold assets. On May 24, 2022, the Company submitted a letter of intent to purchase the Stronghold assets for a price of $460.0 million consisting of $210.0 million cash, assumption of Stronghold’s hedge liabilities of $20.0 million and $230.0 million of the Company’s Common Stock along with a willingness to make a cash deposit of 10% of the purchase price, all subject to the negotiation and execution of a customary purchase and sale agreement.
On May 26, 2022, representatives of Stronghold’s investment banker informed the Company that its bid set forth in the May 24, 2022 letter of intent was generally acceptable and on May 31, 2022 representatives of the Company and Stronghold met in the offices of Stronghold’s counsel to begin the process of finalizing a purchase and sale agreement relating to the Company’s purchase of the Stronghold assets. See “The Purchase and Sale Agreement” below.
Early on in the negotiations and finalization of the Purchase Agreement, the parties were advised that the number of shares of stock that maythe Company’s Common Stock required to be issued under the Plan except for certain adjustments.


Federal Income Tax Consequences


The following is a summaryas part of the United States federal income tax consequences that generally will arise with respectpurchase price would exceed 20% of the total number of its then outstanding Common Stock, thereby triggering Rule 712(b) of the NYSE American. That rule requires stockholder approval of such issuance.


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In an effort to awards granted under our Plan.  This summary is based onexpedite closing despite the federal income tax laws in effectconstraints imposed by the NYSE American stock issuance limitation, the parties negotiated for stock consideration either to consist (i) only of Common Stock at closing, subject to stockholder approval at a meeting to take place between the signing of the Purchase Agreement and the closing of the Stronghold Acquisition or (ii) (A) of an amount of Common Stock equal to 19.9% of the Company’s total Common Stock outstanding as of the date of the agreement, and (B) the balance of the Common Stock consideration to be issued in the form of Preferred Stock that would automatically convert following approval of the Company’s stockholders at a meeting to be held shortly following the closing of the Stronghold Acquisition. In connection with the negotiations of the terms of the Purchase Agreement, the terms of the conversion mechanics, liquidation preference, mandatory redemption, voting and consent rights, corporate governance, director nomination rights, registration rights, a lock-up period and other features of the Preferred Stock were negotiated by the parties primarily by reference to comparable public company transactions involving the issuance of stock for the purchase of assets. The Series A Convertible Preferred Stock is discussed in detail above, see “Proposal One — Approval of Conversion of Preferred Stock into Common Stock — Description of Preferred Stock Certificate of Designation.”
The parties exchanged drafts of the Purchase Agreement several times during the course of negotiations. On June 10, 2022, Stronghold sent a revised draft of the Purchase Agreement to reflect the May 31st discussions. The Company provided a return draft of the Purchase Agreement on June 17, 2022. Stronghold sent a revised draft of the Purchase Agreement on June 23, 2022. The Company provided comments to the Purchase Agreement on June 30, 2022. The parties exchanged several drafts of the Purchase Agreement between June 30, 2022 and the signing of the Purchase Agreement on July 1, 2022. Throughout the process, the parties had several negotiation calls to work through material commercial issues. During the course of negotiations, Ring revised the consideration offer to (i) $215.0 million in cash (with $15.0 million in deferred cash consideration), (ii) $20.0 million in hedge loss assumption and (iii) $230.0 million in stock consideration. The Purchase Agreement was executed and delivered by the Company and Stronghold on July 1, 2022. On July 5, 2022, the Company issued a press release announcing the Purchase Agreement.
After the execution and announcement of the Purchase Agreement, the parties evaluated whether a stockholder meeting should be held prior to or after the closing of the Stronghold Acquisition. Due to the timing considerations involved in the preparation of financial statements and other regulatory filing requirements, the parties deemed it impracticable to hold a stockholder meeting prior to the closing of the Stronghold Acquisition. The parties agreed that the Preferred Stock would be issued at closing, with a stockholder meeting to be held shortly after closing.
The Company filed the Certificate of Designation on August 30, 2022. After the expiration of 45-day title and environmental due diligence periods, the Stronghold Acquisition was closed on August 31, 2022.
Recommendation of the Board of Directors and Their Reasons for the Purchase Agreement
Executing, delivering, performing, and closing of the Purchase Agreement was within the powers of the Board of Directors under the Company’s Articles of Incorporation, its bylaws, and Chapter 78 of the Nevada Revised Statutes (the Nevada business corporation law). The Company’s Board unanimously adopted resolutions determining and declaring that (i) the Purchase Agreement and the transactions contemplated thereby, including the Stronghold Acquisition, were fair to, advisable and in the best interests of the Company and its stockholders and that the Purchase Agreement be executed, delivered and closed, (ii) that a two step process be utilized to meet Rule 712(b) of the NYSE American rules regarding stockholder approval of the issuance of 20% or more of the Company’s Common Stock, (iii) that a new Series A Convertible Preferred Stock be created pursuant to the Company’s Articles of Incorporation, and (iv) that 153,176 shares of such Preferred Stock be authorized and issues in accordance with the Purchase Agreement convertible into 42,548,903 fully paid and non assessable shares of the Company’s Common Stock; and a special meeting of the Company’s stockholders be called as soon as reasonably practicable to solicit approval of the automatic conversion of the Preferred Stock into Common Stock. Therefore, this Information Statement.proxy statement is not soliciting stockholder approval of the Stronghold Acquisition which closed on August 31, 2022, but merely the approval to issue shares of the Company’s Common Stock upon conversion of shares of newly created Preferred Stock into Common Stock in accordance with NYSE American rules.

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The Board considered a variety of factors in determining its action in authorizing the Purchase Agreement, including without limitation the following material factors:
•
the Board, assisted by its legal and financial advisors, and management, was active in each phase of the negotiations and the decision-making process leading to the Purchase Agreement;
​
•
the opinion dated July 1, 2022 of Mizuho Securities USA LLC to the effect that, as of such date and subject to the assumptions made, procedures followed, matters considered and other limitations considered in connection with the preparation thereof, the Stronghold Acquisition consideration to be issued and paid by the Company in the Stronghold Acquisition was fair to the Company from a financial point of view;
​
•
Stronghold has a well-established and high-quality asset base that includes:
​
•
approximately 37,000 net acres primarily in Crane County, Texas;
​
•
approximately 99% of the properties are operated and held-by-production; 99% are working interests; averaging an 8/8ths net revenue interest of approximately 88% for oil and 96% for gas;
​
•
production as of June 1, 2022 was approximately 9,000 MBoe/d (approximately 75% liquids); and
​
•
approximately 200 low cost and low risk drilling locations; approximately 200 identified recompletions in stacked pay areas; and over 100 step out locations.
​
•
the Board’s belief that the Common Stock to be issued as part of the purchase price for the Stronghold assets and the seller’s willingness to accept the Company’s Common Stock and Preferred Stock (and the two step process for conversion of the Preferred Stock) was an acquisition technique of advantage to the Company;
​
•
the Board’s belief that the assets available in the Stronghold Acquisition were complementary to those already held by the Company and would be acquired at an attractive price relative to other potential opportunities in the market;
​
•
the Board’s belief that the Stronghold Acquisition would be a significant step in the Company’s growth strategy;
​
•
the potential to realize operational synergies and efficiencies from the increased scale of operations from the Stronghold Acquisition;
​
•
the Board’s belief that the Company’s post-acquisition market capitalization should enhance its future access to debt and equity capital markets on more favorable terms; and
​
•
current industry, economic and market conditions, and the present and anticipated environment in the independent upstream sector of the oil and gas industry suggest that attractive potential acquisition and development opportunities may arise in the sector for companies like the Company that are able to achieve superior operating efficiencies and are sufficiently capitalized to operate in the current commodity price environment and its volatility from time to time.
​
The Board considered other information and a number of additional factors in reaching their decisions including:
•
the business, legal and financial due diligence investigations of Stronghold conducted by our management in consultation with our advisors, and the nature and extent of the representations made by Stronghold in the Purchase Agreement;
​
•
the recommendation of our management in favor of the Stronghold Acquisition;
​
•
the opportunity during the 45-day period following the execution of the Purchase Agreement to identify possible title and environmental defects and the purchase price adjustment mechanism to deal with any such defects;
​
•
the relative attractiveness of the Stronghold assets to other oil and gas assets then being marketed by third parties in the Company’s geographic operating area; and
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•
the terms of the Purchase Agreement, including the obligations and rights of the parties under the Purchase Agreement, the conditions to each parties’ obligation to complete the Purchase Agreement, the circumstances in which each party was permitted to terminate such agreement.
​
The Board also considered, and balanced against the potentially positive aspects of the Stronghold Acquisition, the following material potential risks and other negative factors in connection with its deliberations:
•
the risks attendant to the rights and preferences of the Preferred Stock that will exist if stockholder approval of its conversion is not timely obtained or is not obtained at all, see “Proposal One — Approval of Conversion of Preferred Stock into Common Stock — Consequences of Not Approving the Conversion Proposal”;
​
•
the risks relating to the closing of the Stronghold Acquisition and the risks and costs to us if the integration of the Stronghold Acquisition is not timely, which may be for reasons beyond our control, including the potential impact on the relationships between us and our employees, industry partners, service providers and other third parties, as well as the potential impact on the public trading prices of our Common Stock;
​
•
the level of obligations and servicing of obligations related to incremental debt incurred in connection with the Stronghold Acquisition;
​
•
the possibility of a significant decrease in oil or natural gas prices resulting in the Stronghold assets being less desirable from a financial point of view;
​
•
the risk that management focus, employee attention and resources available for other strategic opportunities could be diverted for an extended period of time while we work to integrate the Stronghold Acquisition;
​
•
the challenges inherent in the integration of the Stronghold assets, including the attendant risks that the anticipated production and operational synergies and other benefits sought to be obtained from the Stronghold Acquisition might not be achieved in the time frame contemplated by us, if at all; and
​
•
the risks inherent in our and Stronghold’s business and operations, including those identified in our SEC filings, which include the matters described above under “Cautionary Statement Concerning Forward-Looking Statements” and below under “Risk Factors”.
​
This discussion of the information and factors considered by our Board in reaching their decision includes certain of the material factors considered by the Board, but is not intended to be exhaustive and may not include all of the factors considered by each member of the Board. In view of the wide variety of factors considered in connection with their evaluation of the Stronghold Acquisition and the complexity of these matters, the Board did not consider it practical, nor did they attempt, to quantify, rank or otherwise assign relative weights to the different factors they considered in reaching their decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to their ultimate determination. Rather, the Board viewed their decision as being based on the totality of the information presented to them and the factors they considered, particularly its discussion with, and the questioning of, members of management and its outside financial and legal advisors. In addition, this summary assumes that all awards are exempt from, or comply with, the rules under Section 409Aindividual members of the Code regarding nonqualified deferred compensation.  ChangesBoard may have given different weight to these laws could alterdifferent factors.
The foregoing discussion of the tax consequencesinformation and factors considered by the Board is forward-looking in nature and should be read in light of the factors described below.


Incentiveabove in the section entitled “Cautionary Statement Concerning Forward-Looking Statements.”

Common Stock Options

and Dividend Information

The closing price of our Common Stock reported on the NYSE American on [•], 2022 was $[•] per share. On September 1, 2022, we had 130,581,374 issued and outstanding shares of Common Stock (giving effect to the issuance of the Common Stock to Stronghold at the closing of the Stronghold Acquisition),

For federal income tax purposes

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which were held by approximately 75 holders of record. Holders of record do not include owners for whom Common Stock may be held in “street” name.
We have never declared or paid any cash dividends on our Common Stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate declaring or paying any cash dividends on our Common Stock in the foreseeable future. Any future determination as currently in effect, a participant will not have income uponto the grantdeclaration and payment of an incentive stock option.  Also, except as described below, a participant will not have income upon exercise of an incentive stock option if the participant has been employed by us or our 50% or more-owned corporate subsidiaries at all times beginning with the option grant date and ending three months before the date the participant exercises the option.  If the participant has not been so employed during that time, then the participantdividends will be taxed as described below under “Non-statutory Stock Options.”  The exerciseat the discretion of an incentive stock option may subject the participant to the alternative minimum tax.


A participant will have income upon the sale of the stock acquired under an incentive stock option at a profit (if sales proceeds exceed the exercise price).  The type of incomeour Board and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors that our Board considers relevant. In addition, our existing revolving credit agreement places restrictions on our ability to pay cash dividends on our Common Stock.

Opinion of Mizuho Securities USA LLC, Financial Advisor to the Board
Pursuant to an engagement letter dated June 27, 2022, the Board formally engaged Mizuho Securities USA LLC (“MSUSA”) as its financial advisor in connection with the Stronghold Acquisition.
On July 1, 2022, MSUSA rendered its oral opinion to the Board which was subsequently confirmed in writing by delivery of MSUSA’s written opinion dated the same date, that, as of July 1, 2022, the consideration consisting of cash payments amounting to, in the aggregate, $215.0 million, subject to normal closing adjustments, the assumption of derivative liabilities valued at $20.0 million as of July 1, 2022, and 21,339,986 shares of Common Stock and 153,176 shares of Preferred Stock convertible into approximately 42,548,903 shares of Common Stock to be issued and paid by the Company in the Stronghold Acquisition was fair, from a financial point of view, to the Company.
MSUSA’s opinion was for the information and use of the Board in connection with its evaluation of the Stronghold Acquisition. MSUSA’s opinion only addressed the fairness, from a financial point of view, to the Company of the Stronghold Acquisition Consideration to be issued and paid by the Company and did not address any other aspect or implication of the Stronghold Acquisition. The summary of MSUSA’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex B to this proxy statement and sets forth the procedures followed, assumptions made, matters considered and limitations and qualifications on the review undertaken by MSUSA in connection with the preparation of its opinion. However, neither MSUSA’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement is intended to be, and they do not constitute, advice or a recommendation to the Board or any Company stockholder as to how they should act on any matter relating to the Stronghold Acquisition including Proposal One — Approval of Conversion of Preferred Stock into Common Stock.
MSUSA is a trade name of Mizuho Securities USA LLC, an investment banking subsidiary and affiliate of Mizuho Financial Group, Inc. The Company retained MSUSA as its financial advisor in connection with the Stronghold Acquisition based on MSUSA’s experience and reputation. MSUSA is regularly engaged to provide investment banking and financial advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Upon rending the opinion, the Company paid MSUSA a fee of $1.0 million. In addition, the Company reimbursed MSUSA for certain expenses and agreed to indemnify MSUSA and certain related parties against certain liabilities and other items that may arise out of or relate to MSUSA’s engagement. The issuance of MSUSA’s opinion was approved by an authorized committee of MSUSA.
MSUSA and its affiliates provide a wide range of investment and commercial banking advice and services, including financial advisory services, securities underwritings and placements, securities sales and trading, brokerage advice and services, and commercial loans. During the two years preceding the date of MSUSA’s written opinion:
(i)
(A) In the two years prior to the date of the opinion, MSUSA and its affiliates have received aggregate fees of $0.00 from the Company.
​
(B) Mizuho Bank, Ltd. (“Mizuho Bank”), an affiliate of MSUSA, was one of four lenders on a reserve based lending facility to the Company in an aggregate amount of $600.0 million. Mizuho

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Bank’s commitment on the facility was $150.0 million. Mizuho Bank received fees of 200 basis points on the commitment, plus 75 basis points on the amount that Mizuho Bank will retain on its books after syndication.
(C) MSUSA received a fee of $1.0 million for its advisory and fairness opinion services in the Stronghold Acquisition.
(ii)
In the two years prior to the date of the opinion, MSUSA and its affiliates have received aggregate fees of $41.0 million from Warburg Pincus, a controlling stockholder of Stronghold. This includes both revenue directly received from Warburg Pincus and revenues received from Warburg Pincus portfolio companies. The revenue includes both fee and flow revenue.
​
(iii)
In the two years prior to the date of the opinion, MSUSA and its affiliates have received aggregate fees of $0.00 from Stronghold.
​
Board of Directors and Management of the Company Following Completion of the Stronghold Acquisition
Upon closing of the Stronghold Acquisition, Stronghold possessed the right to designate two directors to the Board. On September 1, 2022, Roy Ben-Dor and David Habachy were appointed to the Company’s Board. Following the Stronghold Acquisition, so long as Stronghold continues to beneficially own at least 15% of our issued and outstanding Common Stock (taking into account their ownership of the Preferred Stock on an as converted basis), it shall have the right to designate two directors to the Company’s Board. If Stronghold holds less than 15% of our outstanding Common Stock but at least 10%, it shall have the right to designate one director, and the Company shall use its best efforts to nominate, recommend and cause such persons to be elected to the Board. Executive management will remain unchanged after the Stronghold Acquisition. Additionally, the Company will continue to be headquartered in The Woodlands, Texas.
Interests of Certain Persons in the Stronghold Acquisition
On September 1, 2022, as described above, Roy Ben-Dor and David Habachy were appointed to the Company’s Board pursuant to the Stronghold’s director nomination rights. Mr. Ben-Dor is a managing director of Warburg, which manages certain investment funds holding a controlling interest in Stronghold. Mr. Habachy was formerly employed at Warburg. Based on the capitalization of the Company as of the closing of the Stronghold Acquisition and the Common Stock issuable on conversion of the Preferred Stock at the initial conversion rate, would result in Stronghold owning approximately 36.9% of our outstanding Common Stock after giving effect to such issuance and conversion.
Because Mr. Ben-Dor and Mr. Habachy did not join the Company’s Board until after the consummation of the Stronghold Acquisition, they did not participate in their capacity as directors in discussions of, or vote with respect to matters related to, the Stronghold Acquisition, and were not members of the Board when the participant sellsBoard voted to recommend approval by our stockholders of the stock.  Ifproposals in this proxy statement.
Except as described above, no person who has served as an officer or director of the Company since the beginning of our last fiscal year, and no associate of such a participant sellsperson, has any substantial interest in the stock moreStronghold Acquisition, other than two years(i) as a result of his or her role as an officer or director of the Company or (ii) in his or her role as a stockholder of the Company in proportion to his or her percentage shareholding.
Regulatory Filings and Approvals Required for Completion of the Stronghold Acquisition
The completion of the Stronghold Acquisition was subject to antitrust review in the United States. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the rules promulgated thereunder, the acquisition could not be completed until the parties have given notification and furnished information to the Federal Trade Commission (the “FTC”) and the United States Department of Justice (the “DOJ”), and until the applicable waiting period has expired or has been terminated.
On July 15, 2022, the Company and Stronghold each filed a premerger notification and report form under the HSR Act. A transaction notifiable under the HSR Act may not be consummated until the expiration of a 30 calendar day waiting period following the parties’ filing of their respective HSR Act notification forms, unless extended by a request for additional information or the waiting period is terminated

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earlier. The HSR Act waiting period expired on August 14, 2022 with no requests for additional information or objections raised by either the FTC or the DOJ.
At any time after consummation of the acquisition, the FTC or the DOJ, or any state, could however take such action under antitrust laws as it deems necessary or desirable in the public interest, including seeking the divestiture of assets of the Company. Private parties may also seek to take legal action under antitrust laws under certain circumstances.
Treatment of Equity Awards
The Stronghold Acquisition will not affect any outstanding equity awards made by the Company, other than reduced ownership and voting power as a result of the issuance of Common Stock (including upon conversion of the Preferred Stock) to Stronghold as consideration for the Stronghold Acquisition. See “Risk Factors — Our current stockholders will have a reduced ownership and voting power after the option was grantedStronghold Acquisition.” All such awards will remain outstanding subject to the same terms and more than one year afterconditions that are applicable prior to the option was exercised, then allStronghold Acquisition.
No Appraisal Rights
The Company stockholders do not have any rights to appraisal with respect to the Stronghold Acquisition or the NYSE American approval under Nevada law.
Accounting Treatment of the profitStronghold Acquisition
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Stronghold Acquisition will be long-term capital gain.  If a participant sells the stock prior to satisfying these waiting periods, then the participant will have engagedaccounted for as an asset acquisition in a disqualifying disposition and a portion of the profit will be ordinary income and a portion may be capital gain.  This capital gain will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.  If a participant sells the stock at a loss (sales proceeds are less than the exercise price), then the loss will be a capital loss.  This capital loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.


Non-statutory Stock Options


A participant will not have income upon the grant of a non-statutory stock option.  A participant will have compensation income upon the exercise of a non-statutory stock option equal to theaccordance with Accounting Standards Codification Topic 805, Business Combinations. The fair value of the stock onconsideration paid by Ring and the day the participant exercised the option less the exercise price.  Upon saleallocation of the stock, the participant will have capital gain or loss equalthat amount to the difference between the sales proceeds and theunderlying assets acquired is recorded on a relative fair value of the stock on the day the option was exercised.  This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.




Restricted Stock Awards


A participant will not have income upon the grant of restricted stock unless an election under Section 83(b) of the Code is made within 30 days of the date of grant.  If a timely Section 83(b) election is made, then a participant will have compensation income equalbasis. Additionally, costs directly related to the valueStronghold Acquisition are capitalized as a component of the stock less the purchase price. WhenThe preliminary allocation of the stocktotal purchase price in the Stronghold Acquisition is sold, the participant will have capital gain or loss equalbased upon management’s estimates of and assumptions related to the difference between the sales proceeds and thefair value of assets to be acquired and liabilities to be assumed as of the stockclosing date of the transaction using currently available information and market data as of August 31, 2022. The operating results of Stronghold will be consolidated in our financial statements beginning on the date of grant.  the closing of the Stronghold Acquisition.

Listing of Shares of Common Stock
Completion of the Stronghold Acquisition required that the Company deliver evidence reasonably satisfactory to Stronghold that it (A) had filed a supplemental listing application with the NYSE American with respect to the issuance of the Common Stock to be issued in the Stronghold Acquisition and (B) the Common Stock had been approved and authorized for listing on the NYSE and both were completed prior to the closing of the Stronghold Acquisition on August 31, 2022.
If the participantCompany stockholders approve the Conversion Proposal, the Company will file an additional supplemental listing application with the NYSE American with respect to the issuance of the Common Stock upon conversion of the Preferred Stock.

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RISK FACTORS
In addition to the other information included and incorporated by reference into this proxy statement, including the matters addressed in the section entitled “Cautionary Statement Concerning Forward-Looking Statements,” you should carefully consider the following risks. In addition, you should read and consider the risks associated with our business. Descriptions of some of these risks can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated by any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this proxy statement. You should also read and consider the other information in this proxy statement and the other documents incorporated by reference into this proxy statement. See the sections entitled “Information Incorporated by Reference” and “Where You Can Find More Information.”
Risks Relating to the Conversion Proposal and the Stronghold Acquisition
If the Conversion Proposal is not approved by stockholders at this time, the Company’s stockholders may be subject to increasingly higher rates of dilution from a future conversion of the Preferred Stock or may be required to redeem all outstanding shares of Preferred Stock for cash.
If the Conversion Proposal is not approved at the Special Meeting (or subsequent meetings), the Preferred Stock will remain outstanding with all terms, rights and privileges currently existing, including (i) certain dividend payments or increases to the liquidation preference of the shares of the Preferred Stock and (ii) mandatory redemption of the Preferred Stock for cash on September 30, 2027, 61 months following the closing of the Stronghold Acquisition.
If a stockholder vote does not make a Section 83(b) election, then whenapprove the stock vests the participant will have compensation income equal to the valueconversion of the stock onPreferred Stock into shares of Common Stock, the vesting date lessPreferred Stock will remain outstanding and will continue to have all the purchase price.  When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the valuepowers, rights and preferences discussed below. If stockholder approval of the stock onConversion Proposal is not received pursuant to this proxy statement, the vesting date.  Any capital gain or lossCompany will be long-term if the participant held the stock for more than one year and otherwise will be short-term.


Other Stock-Based Awards


The income tax consequences associated with any other stock-based award granted under our Plan will vary depending on the specific terms of such award.  Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subjectrequired to forfeiture provisions or restrictions on transfer, the natureseek further stockholder votes seeking approval of the property to be received byconversion of the participant underPreferred Stock into shares of Common Stock. If the award and the participant’s holding period and tax basis for the awardPreferred Stock has not automatically converted into Common Stock on or underlying common stock.


Tax Consequences to the Company


There will be no income tax consequences to the Company except that webefore January 31, 2023, then each holder of Preferred Stock will be entitled to receive dividends at an annual rate of 8.0% of the initial liquidation preference per share from the date of issuance. If a deduction when a participant has compensation income.  Any such deductioncash dividend is not declared and paid on any dividend payment date, then the liquidation preference per share of Preferred Stock will be subjectincreased by the amount of the unpaid dividend. Therefore, in the event that the Company continues to seek approval for the conversion of the Preferred Stock after January 31, 2023, then the Company would be required to solicit stockholder approval for an increasingly larger number of shares of Common Stock into which the Preferred Stock will convert due to any increases to the limitationsliquidation preference per share of Section 162(m)Preferred Stock.

The Preferred Stock could significantly affect our ability to undertake certain corporate events.
So long as any shares of Preferred Stock remain outstanding, we have agreed not to take any of the Code.


PROPOSAL TO AMEND RING ENERGY, INC. LONG TERM INCENTIVE PLAN


General


On December 27, 2012,following actions without the Board of Directors, by unanimous written consent, approved an amendment to the Ring Energy, Inc. Long Term Incentive Plan (the “Plan”) to increase the total shares authorized under the Plan from 2,500,000 to 5,000,000.  Under the Section 9.2 of the Plan, “The Plan may not be amended without theaffirmative vote or consent of the holders of a majority of the shares of Preferred Stock thenvoting separately as a single class:

(a)
create, authorize (including by way of reclassification, merger, consolidation, subdivision or other similar reorganization) or issue any of our equity securities except with respect to certain employee plans, including additional shares of Series A Preferred Stock;
​
(b)
redeem, acquire, engage in a tender offer (other than responding to a third-party tender offer as required by applicable law) or otherwise purchase any of our equity securities except with respect to certain employee plans;
​
(c)
declare or pay, set apart for payment in respect of or make any direct or indirect distribution or distribution (whether in cash, securities or other property) in respect of any equity securities, other than with respect to the Preferred Stock;
​
(d)
amend, repeal, modify or alter our Articles of Incorporation or Bylaws so as to affect adversely the rights, preferences, privileges or voting or consent rights of the Series A Preferred Stock or the holders of the Series A Preferred Stock;
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(e)
announce, authorize or enter into any agreement related to or consummate a material transaction, including (but not limited to) any change of control as such terms are defined in the Certificate of Designation; or
​
(f)
increase or decrease the size of the Board other than as set forth in the Purchase Agreement or any ancillary documents thereto.
​
Therefore, as long as the Preferred Stock remains outstanding, the Company may be required to seek separate approval by the holders of the Preferred Stock before the Company executes certain strategic transactions, which may increase materially the aggregatecomplexity and costs associated with the execution of such strategic transactions and may adversely impact the Company’s business and financial results. The holders of the shares of Preferred Stock may also have a significant influence on the management of the Company’s finances, operations, cash management and corporate governance.
The market price of our Common Stock may decline in the future as a result of the Stronghold Acquisition.
The market price of our Common Stock may decline in the future as a result of the Stronghold Acquisition for a number of sharesreasons, including the dilutive impact of Stock that may be issued under the Plan…”


Purpose for Increaseissuance of Authorized Shares


The amendment to increase the number of authorized shares of Common Stock, issuableincluding upon conversion of the Preferred Stock, as consideration for the Stronghold Acquisition, the unsuccessful integration of Stronghold’s assets with those of the Company and our failure to achieve the perceived benefits of the Stronghold Acquisition, including financial and operating results, as rapidly as, or to the extent anticipated by, financial or industry analysts. Some of these factors are beyond our control.

Our current stockholders have reduced ownership and voting power as a result of the Stronghold Acquisition.
Stockholders who owned shares of Common Stock prior to the closing of the Stronghold Acquisition have a lower percentage ownership and correspondingly reduced voting power than they held immediately prior to the Stronghold Acquisition. As a result of the Common Stock that we have issued and expect to issue in conversion of our Preferred Stock, such pre-Stronghold Acquisition stockholders will hold approximately 63% of the Company’s total voting power. Therefore, the Company’s pre-Stronghold Acquisition stockholders have significantly less ability to influence significant corporation decisions that require approval of holders of the outstanding Common Stock.
If the shares of Preferred Stock do not convert into shares of Common Stock pursuant to the Conversion Proposal, then the holders of such shares of Preferred Stock will also continue to maintain certain voting and consent rights. See “— The Preferred Stock could significantly affect our ability to undertake certain corporate events.”
We may be unable to successfully integrate Stronghold’s assets and operations or to realize anticipated cost savings, revenues or other benefits from the Stronghold Acquisition.
Our ability to achieve the anticipated benefits of the Stronghold Acquisition will depend in part upon whether we can successfully integrate the assets and operations into our existing business in a timely, efficient and effective manner. The beneficial acquisition of producing and non-producing properties and undeveloped acreage that can be economically developed, requires an assessment of several factors, including:
•
recoverable reserves;
​
•
future oil and natural gas prices and their market differentials;
​
•
availability and cost of transportation of production to markets;
​
•
availability and cost of drilling and completion equipment and of skilled personnel;
​
•
development and operating costs and potential environmental and other liabilities; and
​
•
regulatory, permitting and similar matters.
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The accuracy of these assessments is inherently uncertain. In connection with these assessments, we have performed, and will continue to perform, a review of the properties of Stronghold that we believe to be generally consistent with reasonable industry practices. Our review may not reveal all existing or potential

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problems or permit us to become sufficiently familiar with the properties to fully assess their deficiencies and potential recoverable reserves. Inspections will not always be performed on every well, and environmental problems are not necessarily observable even when an inspection is undertaken. The integration process may be subject to delays or changed circumstances, and we can give no assurance that the acquired properties will perform in accordance with our expectations or that our expectations with respect to integration or cost savings resulting from added scale as a result of the Stronghold Acquisition will materialize. Significant acquisitions, including the Stronghold Acquisition, and other strategic transactions may involve other risks that may cause negative impacts on our business, including:
•
diversion of our management’s attention resulting in the inability to fully evaluate, negotiate and integrate other significant acquisitions and strategic transactions;
​
•
the operational challenges and cost of integrating the assets and operations acquired in the Stronghold Acquisition with existing assets and operations while carrying on our ongoing business; and
​
•
the failure to realize the full benefit that we expect in estimated proved reserves, production volume, cost savings from operating synergies or other benefits anticipated from the Stronghold Acquisition, or to realize these benefits within the expected time frames.
​
We have limited recourse against Stronghold regarding the properties acquired in the Stronghold Acquisition for losses and liabilities arising or discovered after closing of the Stronghold Acquisition.
Under the terms of the Purchase Agreement, we have only limited recourse against Stronghold for losses and liabilities arising or discovered after the closing of the Stronghold Acquisition. We have limited indemnification rights in the event of a breach of a representation, warranty or covenant by Stronghold. We also have limited rights to assert title defects or environmental defects, and any claims for title or environmental defects which were not timely and properly asserted by us by 5:00 pm CT on August 15, 2022 have been deemed waived. As is customary in oil and gas transactions, we have agreed to assume various liabilities associated with Stronghold’s oil and gas assets, including environmental liabilities, plugging and abandonment obligations, and unpaid royalties, regardless of when such liabilities arose.
The representations and warranties provided by Stronghold are limited as to scope and in many cases, qualified by knowledge and materiality thresholds. We must bring any claims for indemnification for a breach of a representation or warranty not involving title and environmental defects within the time period after the closing specified in the Purchase Agreement, and for most representations and warranties, this time period generally ends twelve months after closing of the Stronghold Acquisition.
Indemnification claims related to breaches of non-fundamental representations of Stronghold are subject to an individual claim threshold of $100,000 and Stronghold is only required to indemnify us for claims totaling in excess of 2.0% of the unadjusted base purchase price for such claims. In addition, our right of recovery in most circumstances relating to a breach of a non-fundamental representations is limited to 20% of the unadjusted purchase price. Indemnity claims are to be first satisfied through the deferred cash consideration, then the Preferred Stock holdback amount and finally, the cash holdback amount. Six months after the closing date, the cash holdback amount is released from the indemnity escrow (subject to any unresolved claims that are not satisfiable through the Preferred Stock holdback amount). We have conducted considerable diligence on the properties acquired in the Stronghold Acquisition, but our diligence may not have uncovered all events or conditions that might negatively affect the value of the Assets within such time periods. The short period for asserting claims for indemnification increases the likelihood that we may incur or uncover liabilities for which we have no recourse.
The Company has incurred a substantial amount of indebtedness and other payment obligations in connection with the financing for the Stronghold Acquisition.
In connection with the Stronghold Acquisition, we have amended and restated our credit facility to increase the total borrowing capacity to $1,000,000,000 with an initial borrowing base of approximately $600.0 million (up from a $350.0 million borrowing base).
As of June 30, 2022, we had borrowings of $270.0 million outstanding on the credit facility, we borrowed approximately an additional $168.0 million in order to fund the cash portion of the purchase

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price of the Stronghold Acquisition. The credit facility is secured by a first lien on substantially all of the Company’s assets including those acquired in the Stronghold Acquisition.
We cannot guarantee that we will be able to generate sufficient cash flow to service and repay our indebtedness under the Plancredit facility. If we are unable to service such indebtedness and fund our operations, we may be forced to reduce or delay capital expenditures, seek additional capital, sell assets or refinance our indebtedness. Any such actions may not be successful or may be on terms disadvantageous to us and our stockholders. A default by us on this indebtedness would have a material adverse effect on our business, financial condition, results of operations, cash flows and/or share price. In addition, an uncured default on the obligations under the credit facility could lead to the lenders under the credit facility enforcing their security interest rights, including seizing the collateral securing the loan.
The financial analyses and forecasts considered by the Board and its financial advisor may not be realized, which may adversely affect the market price of the Common Stock.
In performing its financial analyses and rendering its opinion regarding fairness, from a financial point of view of the Stronghold Acquisition Consideration, at the direction of the Board, the financial advisor to the Board relied on, among other things, internal forecasts and projections provided to it. The forecasts were prepared by the Company management. None of these analyses and forecasts was prepared with a view towards public disclosure or compliance with the published guidelines of the SEC, GAAP, or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them. These projections are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of the Company. There can be no assurance that the Company’s financial condition or results of operations will be consistent with those set forth in such analyses and forecasts, which could have a material impact on the market price of the Common Stock.
The pro forma condensed combined financial information incorporated by reference in this proxy statement is presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Stronghold Acquisition.
The pro forma condensed combined financial information incorporated by reference in this proxy statement is presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of our financial condition or results of operations following the Stronghold Acquisition. See “Information Incorporated by Reference.” The actual financial condition and results of operations of the Company following the Stronghold Acquisition may not be consistent with, or evident from, these pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the Stronghold Acquisition. Any potential decline in our financial condition or results of operations may adversely affect the market price of our Common Stock.
Risks Relating to the Company’s Business
You should read and consider risk factors specific to the Company’s business that will also affect the Company after the completion of the Stronghold Acquisition. These risks are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated by any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each of which is incorporated by reference herein. For the location of information incorporated by reference in this proxy statement, please see the section entitled “Information Incorporated by Reference” and “Where You Can Find More Information.”

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THE PURCHASE AND SALE AGREEMENT
The following summarizes material provisions of the Purchase Agreement. This summary does not purport to be complete and may not contain all of the information about the Purchase Agreement that is important to you. The rights and obligations of the parties were governed by the express terms and conditions of the Purchase Agreement and not by this summary or any other information contained in this proxy statement. This summary is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached as Annex A to this proxy statement.
In reviewing the Purchase Agreement and this summary, please recognize that they have been included to provide you with background information and are not intended to enableprovide any other factual information about the Company or Stronghold. The Purchase Agreement contains representations and warranties and covenants made by each of the parties thereto. These representations and warranties have been made solely for the benefit of the other parties to continuethe Purchase Agreement and:
•
were not intended as statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
​
•
may apply standards of materiality in a way that is different from what may be viewed as material by you or other investors; and
​
•
disclosure schedules to the Purchase Agreement may have materially qualified certain representations and warranties.
​
Moreover, information concerning the subject matter of the representations and warranties in the Purchase Agreement and described below may have changed since the date of the Purchase Agreement and subsequent developments or new information qualifying a representation or warranty may not have been included in this proxy statement. See “Where You Can Find More Information.”
General
In general, the Purchase Agreement provided for the acquisition by the Company of interests in oil and gas leases, wells, equipment and related property of Stronghold located in the central basin platform of the Permian Basin, Texas, principally in Crane County, Texas (the “Assets”). This is and has been referred to herein as the “Stronghold Acquisition” which was completed and closed on August 31, 2022. The Purchase Agreement had an adequateeffective time of 12:01 a.m., Central Time, on June 1, 2022 for purposes of allocating revenues and property expenses, the “Effective Time.”
The cash portion of the purchase price was subject to adjustment under the Purchase Agreement by increases or decreases in several operating and other categories to take into account matters occurring before and after the Effective Time. As a result of these adjustments and giving effect to the (i) cash deferral of $15.0 million; (ii) the Deposit Amount credit of $46.5 million (net of the indemnity holdback of $8,250,000), the Company paid a total of $167.9 million cash at closing in addition to issuing the shares of Common Stock and Preferred Stock mentioned above.
The value of the Company’s shares of Common Stock, and the conversion value of Preferred Stock at execution of the Purchase Agreement on July 1, 2022 was determined to be $3.60 per share which was the volume weighted average price of the Common Stock over the 20 trading days immediately preceding the execution date. The trading price of the Company’s Common Stock on August 30, 2022 (the day before the August 31, 2022 closing date of the Purchase Agreement) of $3.12 per share was used for accounting purposes, which price varied from the price used at execution of the Purchase Agreement on July 1, 2022.
Certain Ordinary-Course Costs and Revenues
(a)   With respect to revenues earned or property costs incurred with respect to the Assets attributable to the time period prior to the Effective Time:
(i)   Stronghold was entitled to all amounts earned from the sale, during the period up to but excluding the Effective Time, of hydrocarbons produced from, or attributable to, the Assets; and

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(ii)   Stronghold was responsible for (and entitled to any refunds and indemnities with respect to) all property costs incurred prior to the Effective Time.
(b)   With respect to revenues earned or property costs incurred with respect to the Assets from and after the Effective Time:
(i)   the Company was entitled to all amounts earned from the sale, during the period from and after the Effective Time, of hydrocarbons produced from, or attributable to, the Assets; and
(ii)   the Company was responsible for (and entitled to any refunds and indemnities with respect to) all property costs incurred from and after the Effective Time.
AGREEMENTS RELATED TO THE STRONGHOLD ACQUISITION AND THE PREFERRED STOCK
The following summary describes certain aspects of the Company’s Certificate of Designation, its amended and restated credit agreement (the “Credit Facility”), a Registration Rights Agreement, a Lock-up Agreement and a Director Nomination Agreement all entered into at the closing of the Stronghold Acquisition. This discussion does not purport to be complete and is qualified in its entirety by reference to the Certification of Designation, the Credit Facility, the Registration Rights Agreement, the Lock-up Agreement, and the Director Nomination Agreement which are incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 6, 2022.
Certificate of Designation
Our Board of Directors approved and filed with the State of Nevada a Certificate of Designations of Preferred Stock that created our Series A Convertible Preferred Stock effective August 30, 2022. In connection with the Stronghold Acquisition, the Board of Directors approved the issuance on August 31, 2022 of 153,176 shares of this series of Preferred Stock having the following attributes:
Rank.   The Preferred Stock ranks as to dividends or distributions of assets upon the Company’s liquidation, dissolution or winding up, whether voluntarily or involuntarily, as follows:
•
senior to the Common Stock with respect to dividends and with respect to distributions upon a deemed dissolution, liquidation or winding-up of the Company;
​
•
senior to any class or series of the Company’s capital stock after the Preferred Stock is created specifically ranking by its terms junior to the Preferred Stock;
​
•
pari passu with any class or series of the Company’s capital stock after the Preferred Stock is created specifically ranking by its terms on a parity with the Preferred Stock; and
​
•
junior to any class or series of the Company’s capital stock after the Preferred Stock is created specifically ranking by its terms senior to the Preferred Stock.
​
Voting Rights.   The holders of shares of Preferred Stock generally have no voting rights, except as required by law, and except that the consent of the majority of holders of the outstanding Preferred Stock is required to: (i) create, authorize or issue any equity securities of the Company other than in connection with issuances of junior securities under the Company’s equity incentive plans as in effect at the time of the issuance of the Preferred Stock; (ii) redeem, acquire or make a Company tender offer for any equity securities of the Company (other than in connection with repurchases by the Company in connection with its equity incentive plans); (iii) generally declare or pay dividends or direct or indirect distributions (other than distributions on the Preferred Stock); (iv) generally increase or decrease the size of the Board except as set forth in the Purchase Agreement or any ancillary document thereto; (v) announce, authorize or enter into any agreement related to a material transaction (material acquisitions, mergers, tender offers, business combinations and similar transactions) or change of control of the Company; (vi) amend, repeal, modify, or alter the Company’s Articles of Incorporation or Bylaws in any manner that adversely affects any rights of the holders of Preferred Stock; and (vii) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation.

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Distributions.   When and if declared by the Board, the Preferred Stock will be entitled to preferred distributions at a rate of 8.0% per annum of the liquidation preference per share, which is initially $1,000 per share, plus any accrued and unpaid distributions through the date of conversion, payable each calendar quarter. To the extent distributions are not declared and paid, then on each distribution date the unpaid distribution per share will be added to the per share liquidation preference described below and used for the purpose of the accrual of future distributions, the determination of the liquidation preference and determination of the number of shares of Common Stock availableissuable on conversion. Notwithstanding the foregoing, no distributions will be paid on the Preferred Stock if it is converted into Common Stock on or before January 31, 2023.
In addition, the holders of Preferred Stock are entitled to attractreceive, and retain qualified directors, officers,the Company is required to pay, dividends on shares of the Preferred Stock equal (on an as if converted to Common Stock basis) to and employees.  Ofin the total 2,500,000same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.
Conversion and Limitations.   The Preferred Stock may not be converted into Common Stock until such time as stockholder approval is received, which is defined as the date requisite approval from holders of capital stock of the Company is received as required at law or under the applicable securities exchange rules (currently the NYSE American Stock Exchange). Upon receiving stockholder approval, each share of issued Preferred Stock will be automatically converted into such number of shares of Common Stock reserveddetermined by dividing (i) the liquidation preference (described below) as of the conversion date by (ii) the conversion price which is initially $3.60 per share (subject to adjustment for issuance understock splits and distributions, recapitalizations, exchanges and similar actions), such calculation, as so adjusted from time to time, the Plan, options to purchase 1,175,000“Conversion Rate”. The initial Conversion Rate is 277.7778 shares of Common Stock were issued and outstanding asfor each share of Preferred Stock.
Liquidation Preference.   Upon a liquidation event, the holders of the datePreferred Stock are entitled to a “liquidation preference” of this Information Statement and 1,325,000 shares remained available for future awards under$1,000 per share plus any unpaid distributions noted above. A “liquidation event” means (i) any voluntary or involuntary liquidation, dissolution or winding-up of the PlanCompany or (ii) the consummation of a change of control (which generally means (x) the acquisition by a person of more than 50% of the combined voting power of the Company); (y) approval of the sale or disposition by the Company of substantially all the assets of the Company; or (z) approval by the stockholders of the Company of any merger, consolidation or statutory share exchanges as a result of the Company stockholders immediately prior to the increase proposed by this amendment.


VOTING PROCEDURES


Vote(s) Required; Insider Voting Intentions


In order foreffective date of such action have less than 50% percent of the proposalsvoting power in selection of directors of the surviving corporation.

If, on a fully converted basis, the amount that the holders of the Preferred Stock would receive is greater than their liquidation preference, then instead they are to be approved pursuant to Nevada law, we must receive the written consent“as-converted” amount meaning the amount such holders would have received if the Preferred Stock had been converted to the number of a majority of the outstanding shares of Common Stock (the “Requisite Consents”).  Each shareto which they would be entitled as of the liquidation event.
The Certificate of Designation provides that when there is a liquidation event where the proceeds include both cash and property, the holders of Preferred Stock are to receive cash to the extent possible.
Redemption.   If the Preferred Stock has not been converted prior to September 30, 2027, the date that is 61 months following the closing of the Stronghold Acquisition on August 31, 2022, to the extent legally permissible, the Company must redeem all outstanding shares of Preferred Stock in cash at the greater of the liquidation preference or the market price of Common Stock entitles thethat each holder of record to one vote.  Failure to vote (return a written consent form) at all will have the effect of a vote against the proposals.  Abstentions will have the effect of a vote against the proposals.  Broker non-votes will have the effect of a vote against the proposals.


Each member management owningwould receive if such holder had fully converted into shares of Common Stock on the Company, which in the aggregate represent approximately 34%redemption date.

Other Provisions.   So long as any shares of Preferred Stock remain outstanding, we have agreed not to take any of the voting controlfollowing actions without the affirmative vote or consent of the Company, has indicated his intent to give written consent (as shareholder) in favor of the proposals.  We will not follow through with the proposals unless we also receive the written consentholders of a majority of the shares of CommonPreferred Stock which would be duly outstanding onvoting separately as a single class:
(a)
create, authorize (including by way of reclassification, merger, consolidation, subdivision or other similar reorganization) or issue any of our equity securities except with respect to certain employee plans, including additional shares of Series A Preferred Stock;
​

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(b)
redeem, acquire, engage in a tender offer (other than responding to a third-party tender offer as required by applicable law) or otherwise purchase any of our equity securities except with respect to certain employee plans;
​
(c)
declare or pay, set apart for payment in respect of or make any direct or indirect distribution or distribution (whether in cash, securities or other property) in respect of any equity securities, other than with respect to the Record Date.



Preferred Stock;
​
(d)

Our board of directors recommends that you vote (give written consent) “FOR” the proposals.


Procedure for Implementing the Proposals


The Articles Amendment would become effective upon (i) the filing by us with the Nevada Secretary of State of a Certificate of Amendment to

amend, repeal, modify or alter our Articles of Incorporation reflectingor Bylaws so as to affect adversely the Articles Amendment, pursuant to Section 78.390(1)rights, preferences, privileges or voting or consent rights of the Nevada Revised Statutes,Series A Preferred Stock or the holders of the Series A Preferred Stock;
​
(e)
announce, authorize or enter into any agreement related to or consummate a material transaction, including (but not limited to) any change of control as such terms are defined in the Certificate of Designation; or
​
(f)
increase or decrease the size of the Board other than as set forth in the Purchase Agreement or any ancillary documents thereto.
​
Credit Facility
On July 1, 2022, the Company received a commitment letter from four commercial banks, committing to provide a $1,000,000,000 revolving senior credit facility with an initial borrowing base of $600,000,000 effective as of the closing of the Stronghold Acquisition. Of this credit facility, $168.0 million was used to partially fund the closing of the Stronghold Acquisition.
The credit facility is in the form of a “Second Amended and Restated Senior Credit Agreement” and has provisions regarding, among other things, borrowing base redetermination dates and procedures, interest rate elections, affirmative and negative financial and other covenants and default provisions. The next regularly scheduled redetermination of the borrowing base is expected to occur on or around November 1, 2022. Subsequent redeterminations are scheduled to occur on or about each May 1st and November 1st thereafter.
The amounts borrowed under the Credit Agreement bear annual interest rates at either (a) the adjusted Secured Overnight Financing Rate (the “Adjusted Term SOFR Rate”) plus 3.0% to 4.0% or (b) the sum of (i) the greatest of (A) the prime rate of Truist Bank, (B) the federal funds rate plus 1∕2 of 1.0%, and (C) the Adjusted Term SOFR Rate for an interest rate period of one month plus 1.0%, (ii) plus 2.0% to 3.0%, depending on the amount borrowed under the Credit Agreement. Principal amounts outstanding under the Credit Agreement are due and payable in full at maturity on August 30, 2026. Additional payments due under the Credit Agreement include a fee of 0.50% per year in respect of the unutilized commitments thereunder. The Company is also required to pay customary letter of credit fees.
All of the obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the Company’s assets, including those acquired in the Stronghold Acquisition. The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness, create liens on assets, make investments, pay dividends and distributions or repurchase its Common Stock, engage in mergers or consolidations, sell certain assets, sell or discount any notes receivable or accounts receivable and engage in certain transactions with affiliates.
In addition, the Credit Agreement requires the Company to maintain certain financial covenants: a current ratio (defined in the Credit Agreement generally as the ratio of current assets, including undrawn availability under the credit facility, to current liabilities determined under GAAP) of not less than 1.0 to 1.0 and a consolidated leverage ratio (defined in the Credit Agreement generally as the ratio of consolidated total debt to consolidated earnings before interest, taxes, depreciation, depletion and amortization, exploration expenses and certain non-cash charges) of not greater than 3.0 to 1.0.
The Credit Agreement contains customary affirmative covenants and defines events of default to include failure to pay principal or interest, breach of covenants, breach of representations and warranties,

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insolvency, judgment defaults and changes in control. Upon the occurrence and continuance of an event of default, the lenders have the right to accelerate repayment of the loans under the credit facility and exercise their remedies with respect to the collateral.
As of September 1, 2022, $452.0 million of borrowings were outstanding under the Credit Agreement, bearing annual interest of 6.8%, resulting in an additional $148.0 million of borrowing base availability under the Credit Agreement.
Registration Rights Agreement
At the closing of the Stronghold Acquisition, the Company and Stronghold entered into a registration rights agreement (the “Registration Rights Agreement”) relating to the Common Stock.
The Company shall (i) prepare and file, by no later than the date that is 10 days after the Company’s receipt of all information required from Stronghold to be included in the selling stockholder table of the shelf registration statement, a registration statement under the Securities Act to permit the public resale of the Common Stock held by Stronghold (or a permitted transferee or assignee in accordance with the terms and conditions of the Registration Rights Agreement), from time to time, including as permitted by Rule 415 under the Securities Act (or any similar provision then in force), and (ii) 20 days have passed since this Consent Solicitation Statement was sentuse its reasonable best efforts to shareholders.


The Plan Amendment would notcause the shelf registration statement to become effective untilas soon as reasonably practicable thereafter but in no event later than 45 days (or 90 days, if the shelf registration statement is on Form S-1) after the date hereof; provided, however, in the event of a review by the SEC staff, within five business days of being informed by the SEC staff that the SEC staff have no further comments on the shelf registration statement.

After effectiveness of the shelf registration statement, the Registration Rights Agreement shall terminate and the Company shall have no further rights or obligations thereunder with respect to any individual holder on the date of the earliest to occur of the following: (i) the written consentfirst date after the one-year anniversary of the Registration Rights Agreement on which a majorityholder, together with its affiliates, owns less than one percent (1%) of the Company’s then-outstanding Common Stock, including shares of Common Stock is obtained approvingissuable upon conversion of the Plan Amendment,Preferred Stock (whether or not convertible in accordance with the terms of the Certificate of Designation at such time), and (ii) 20the date on which all Common Stock (including Common Stock issuable on conversion of the Preferred Stock) owned by such holder may be sold without restriction pursuant to Rule 144 (or any similar provision) under the Securities Act with no volume, manner of sale or other restrictions or limitations.
In addition, in the event that the Company proposes to engage in an underwritten offering in which shares of Common Stock are to be sold to an underwriter on a firm commitment basis for reoffering to the public, or an offering that is a “bought deal” with one or more investment banks, the Company will give written notice of the proposed underwritten offering to the parties to the Registration Rights Agreement at least ten business days’ prior to the commencement of such offering, and such parties shall then have the right to include in the underwritten offering such number of shares of Common Stock as they may request in writing within five business days have passed since this Consent Solicitation Statement was sentof receipt of such notice, subject to shareholders.


No Appraisalcertain limitations contained therein. If the underwritten offering is to be structured as an overnight underwritten offering, such that the offering would be launched after the close of trading on one trading day and priced before the open of trading on the next succeeding trading day, the Company will notify the parties to the Registration Rights


Under Nevada law Agreement no later than two business days after the Company engages a managing underwriter and our charter documents,offer such parties the right to include in the overnight underwritten offering such number of shares of Common Stock as they may request in writing, subject to certain limitations contained therein.

Finally, in the event that holders of ourat least $35 million of shares of Common Stock registrable under the Registration Rights Agreement elect to dispose of such Common Stock under the shelf registration statement filed by the Company as required by the Registration Rights Agreement pursuant to an underwritten offering or overnight underwritten offering, the Company will notify the parties to the Registration Rights Agreement of the proposed underwritten offering no later than one business day after the engagement by the Company of the managing underwriter or overnight underwritten offering and offer such parties the opportunity to include in the underwritten offering or underwritten overnight offering such number of shares of Common Stock as they may request in writing.

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The Company will pay all registration expenses incident to the performance of its obligations under the Registration Rights Agreement other than: (i) transfer taxes allocable to the Common Stock; (ii) fees and expenses of counsel engaged by the selling stockholders, except for legal fees of selling stockholders up to $50,000 in connection with the initial shelf registration statement; and (iii) commissions and discounts of brokers, dealers and underwriters.
Lock-up Agreement
At the closing of the Stronghold Acquisition, the Company, Stronghold and certain direct and indirect equity holders of Stronghold who may obtain Common Stock upon a distribution by Stronghold and who execute joinders, entered into a lock-up agreement (the “Lock-up Agreement”) providing that such person will not transfer, subject to limited exceptions, any of the Common Stock for 90 days after the closing of the Stronghold Acquisition (60 days in the case of certain non-affiliates of Warburg Pincus).
Director Nomination Agreement
At closing, the Company and Stronghold entered into a director nomination agreement (the “Director Nomination Agreement”) pursuant to which, among other things, Stronghold (including its transferees and affiliates for purposes of the agreement), possesses the right to designate two directors to (i) the Company’s Board (each, a “Stronghold Director”) and (ii) any one or more special committees that the Board may from time to time resolve to establish, subject to compliance with any rule or regulation of the SEC, the principal U.S. national or regional securities exchange on which the Common Stock is then listed or any other applicable law. In connection with the closing of the Stronghold Acquisition, the Board appointed Roy Ben-Dor and David Habachy and determined Mr. Habachy to be an independent director.
From and after the closing, Stronghold will continue to have the right to designate (i) two Stronghold directors to the Board and any special committee to be established from time to time, for so long as Stronghold beneficially owns at least 15% of the issued and outstanding Common Stock (the “High Threshold Amount”), or (ii) one Stronghold director to the Board and any special committee to be established from time to time, for so long as Stronghold beneficially owns at least 10%, but less than 15% of the issued and outstanding Common Stock (the “Low Threshold Amount”). For so long as Stronghold meets the beneficial ownership threshold for either the Low Threshold Amount of the High Threshold Amount, Stronghold shall be entitled to dissenters’ rights or appraisal rights with respectnominate the applicable number of Stronghold directors, and the Company shall, at each annual meeting of the stockholders of the Company at which any Stronghold director’s term as a director expires, use reasonable best efforts to (x) nominate the applicable number of Stronghold directors for election to the proposals.

Board, (y) recommend that the holders of the Company’s voting stock vote in favor of such Stronghold directors and (z) cause the Stronghold directors to be elected to the Board.


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INFORMATION ABOUT STRONGHOLD
General
Stronghold has approximately 37,000 acres under oil and gas leases primarily in Crane County, Texas. Oil and gas production from the Stronghold properties, virtually all of which are operated by Stronghold, approximated 9,000 MBoe/d as of June 1, 2022. The acreage also contains approximately 500 drilling, recompletion and step out locations for future development.
Financial Statements and Pro Forma Financial Information
Audited historical financial statements of Stronghold as of and for the years ended December 31, 2021 and 2020 and unaudited historical interim financial statements of Stronghold as of and for the six month periods ended June 30, 2022 and 2021 are included in the Company’s Current Report on Form 8-K/A filed with the SEC on September 12, 2022 and incorporated by reference herein.
Unaudited Pro Forma Financial Information for the year ended December 31, 2021 and as of and for the six month periods ended June 30, 2022 and 2021, giving effect to the Stronghold Acquisition as if it had occurred on January 1, 2021 is included in Item 9.01 of the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 12, 2022 and incorporated by reference herein.
Properties
The following sets forth summary information about Stronghold’s properties and operations.
Proved Reserves
Substantially all of Stronghold’s oil and gas reserves are in the Central Basin Platform of the Permian Basin, Texas and it has historically focused on expanding its proved developed producing reserves. Unaudited information concerning the estimated net quantities of Stronghold’s proved reserves and the standardized measure of future net cash flows from the reserves is presented in the Supplemental Oil and Natural Gas Information (Unaudited), in the Historical Consolidated Financial Statements of Stronghold incorporated by reference in this proxy statement. Stronghold’s reserve estimates have been prepared internally by Stronghold management. Set forth below is a summary of Stronghold’s oil, natural gas and natural gas liquids reserves as of December 31, 2021. Stronghold does not have any long-term supply or similar agreements with foreign governments or authorities.
Estimated Proved Reserves Quantities and Standardized Measure
​​​
Oil
(MBbl)
​​
Natural
Gas
(MMcf)
​​
Natural gas
liquids
(MBbl)
​​
Total
(MBOE)(1)
​���
Standardized
Measure of
Discounted Future
Net Cash Flows
($ in thousands)
​
Proved developed​​​​8,074​​​​​27,122​​​​​3,658​​​​​16,252​​​​​225,188​​
Proved undeveloped​​​​1,173​​​​​2,867​​​​​327​​​​​1,978​​​​​34,239​​
Total proved​​​​9,248​​​​​29,990​​​​​3,985​​​​​18,230​​​​​259,427​​
​
(1)
Barrels of oil equivalent have been calculated on the basis of six Mcf of natural gas equal to one Boe.
​

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​​​
Oil
(MBbl)
​​
Natural Gas
(MMcf)
​​
Natural gas
liquids
(MBbl)
​​
Total
(MBOE)(1)
​
Proved reserves at December 31, 2020​​​​7,848​​​​​24,989​​​​​3,094​​​​​15,105​​
Revisions of prior estimates​​​​2,077​​​​​7,991​​​​​1,290​​​​​4,699​​
Extensions and discoveries​​​​407​​​​​435​​​​​80​​​​​559​​
Acquisition of reserves​​​​​​​​​​​​​​​​​​​​​​​​​
Production​​​​(1,084)​​​​​(3,426)​​​​​(479)​​​​​(2,133)​​
Proved reserves at December 31, 2021​​​​9,248​​​​​29,990​​​​​3,985​​​​​18,230​​
Proved developed reserves:​​​​​​​​​​​​​​​​​​​​​​​​​
December 31, 2020​​​​6,602​​​​​21,848​​​​​2,758​​​​​13,000​​
December 31, 2021​​​​8,074​​​​​27,122​​​​​3,658​​​​​16,252​​
​
(1)
Barrels of oil equivalent have been calculated on the basis of six Mcf of natural gas equal to one Boe.
​
Uncertainties are inherent in estimating quantities of proved reserves, including many risk factors beyond Stronghold’s control. Reserve engineering is a subjective process of estimating subsurface accumulations of oil and natural gas that cannot be measured in an exact manner, and the accuracy of any reserve estimate is a function of the quality of available data and the interpretation thereof. Thus, estimates by different engineers often vary, sometimes significantly. In addition, physical factors such as the results of drilling, testing and production after the date of the estimates, as well as economic factors such as change in commodity prices and drilling, completion and operating costs, may require revision of such estimates. Accordingly, oil and natural gas quantities ultimately recovered will vary from reserve estimates.
Proved Undeveloped Reserves
At December 31, 2021, Stronghold had 13 proved undeveloped (“PUD”) locations with 1,978 MBoe of proved undeveloped reserves, which were a result of Stronghold’s 2020 and 2021 successful drilling results and those of offset operators.
Preparation of Reserve Estimates
The proved reserves estimates shown above have been prepared by Stronghold management which has historically prepared annual internal reserve estimates. Proved reserves were estimated in accordance with guidelines established by the SEC, which require that reserve estimates be prepared under existing economic and operating conditions based upon the 12-month unweighted average of the first-day-of-the-month prices. The primary inputs to the reserve estimation process are technical information, financial data, ownership interest and production data. Current revenue and expense information is obtained from Stronghold’s accounting records, which are subject to annual audits. All current financial data such as commodity prices, lease operating expenses, production taxes and field-level commodity price differentials are updated in the reserve database which is prepared by Stronghold’s internal reserve engineer, and then analyzed to ensure that they have been entered accurately and that all updates are complete and accurate. In addition, Stronghold’s current ownership of mineral interests and well production data are incorporated in the reserve database and verified by Stronghold’s personnel to ensure their accuracy and completeness.
Gross and Net Productive Wells
As of December 31, 2021, Stronghold’s total gross and net productive wells were as follows:
​​​
Oil(1)
​​
Natural Gas(1)
​​
Total(1)
​
​​​Gross Wells​​Net Wells​​Gross Wells​​Net Wells​​Gross Wells​​Net Wells​
Operated​​​​418​​​​​411.3​​​​​22​​​​​18.6​​​​​440​​​​​429.9​​
Non-operated​​​​111​​​​​3.1​​​​​0​​​​​0​​​​​111​​​​​3.1​​

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​
(1)
A gross well is a well in which a working interest is owned. The number of net wells represents the sum of fractions of working interests Stronghold owns in gross wells. Productive wells are those that produce commercial quantities of hydrocarbons.
​
Acreage
The following table summarizes Stronghold’s gross and net developed and undeveloped acreage in the Central Basin Platform of the Permian Basin as of December 31, 2021. Net acreage represents Stronghold’s percentage ownership of gross acreage.
​​​Developed​​Undeveloped​​Total​
​​​Gross​​Net​​Gross​​Net​​Gross​​Net​
Central Basin Platform​​​​35,935​​​​​35,851​​​​​640​​​​​350​​​​​36,575​​​​​36,201​​
The following table summarizes, as of December 31, 2021, the portion of Stronghold’s gross and net acreage subject to expiration over the next three years if not successfully developed or renewed.
​​​Expiring Acreage​
​​​2022​​2023​​2024​​Total​
​​​Gross​​Net​​Gross​​Net​​Gross​​Net​​Gross​​Net​
Central Basin Platform​​​​320​​​​​28.459​​​​​0​​​​​0​​​​​320​​​​​298.072​​​​​640​​​​​326.531​​
Exploratory Wells and Development Wells
Set forth below for the two years ended December 31, 2021 is information concerning the number of wells Stronghold completed during the years indicated.
​​​
Net Exploratory
Wells Drilled
​​
Net Development
Wells Drilled
​​
Total Net
Productive
and Dry
Wells Drilled
​
Year​​Productive​​Dry​​Productive​​Dry​
2020​​​​4​​​​​0​​​​​4.0​​​​​0​​​​​4.0​​
2021​​​​8​​​​​0​​​​​8.0​​​​​0​​​​​8.0​​
Drilling Commitments
Stronghold is the operator of 99% of its acreage in the Central Basin Platform. Stronghold began drilling operations in 2017 and has been developing this acreage with the latest completions occurring in mid-2022. It has no drilling commitments.

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Management’s Discussion and Analysis of Stronghold Operations
Results of Operations
Year ended December 31, 2021 compared to the year ended December 31, 2020.
​​​Year Ended December 31,​​​​​​​
​​​2021​​2020​​Change​
Sales volumes (MBoe)(1)
​​​​2,133​​​​​1,672​​​​​461​​
Average daily production (Boe per day)​​​​5,844​​​​​4,568​​​​​1,276​​
Average prices realized (per Boe)​​​$46.24​​​​$23.58​​​​$22.66​​
Average prices adjusted for realized derivatives settlements (per Boe)​​​​36.58​​​​​23.87​​​​​12.71​​
(In thousands)​​​​​​​​​​​​​​​​​​​
Oil, natural gas and natural gas liquids revenues​​​$98,629​​​​$39,420​​​​$59,209​​
Lease operating expenses(2)
​​​​18,676​​​​​11,342​​​​​7,334​​
Transportation and processing costs​​​​5,703​​​​​3,269​​​​​2,434​​
Ad valorem taxes(2)
​​​​649​​​​​854​​​​​(205)​​
Production taxes​​​​4,441​​​​​1,622​​​​​2,819​​
Depreciation, depletion and amortization​​​​21,124​​​​​16,797​​​​​4,327​​
Exploration and abandonment costs​​​​2,136​​​​​734​​​​​1,402​​
Asset retirement obligation accretion​​​​956​​​​​867​​​​​89​​
Operating lease expense(2)
​​​​1,059​​​​​619​​​​​440​​
General and administrative expense(2)
​​​​7,629​​​​​6,581​​​​​1,048​​
Interest expense​​​​2,073​​​​​2,059​​​​​14​​
Gain (loss) on derivative contracts​​​​(31,080)​​​​​(3,772)​​​​​(27,308)​​
Other income (expense)​​​​(33)​​​​​(860)​​​​​827​​
​
(1)
Barrels of oil equivalent have been calculated on the basis of six Mcf of natural gas equals one Boe.
​
(2)
Note that for purposes of discussion and analysis, Ad valorem taxes and Operating lease expense were split from Lease operating expenses and General and administrative expense. Lease operating expenses for the year ended December 31, 2021 consists of Stronghold’s reported amount of $19,899 less $649 in ad valorem taxes and $574 in operating lease expense. Lease operating expenses for the year ended December 31, 2020 consists of Stronghold’s reported amount of $12,442 less $850 in ad valorem taxes and $250 in operating lease expense. General and administrative expense for the year ended December 31, 2021 consists of Stronghold’s reported amount of $8,114 less $485 in operating lease expense. General and administrative expense for the year ended December 31, 2020 consists of Stronghold’s reported amount of $6,954 less $369 in operating lease expense and $4 in ad valorem taxes.
​
Oil, natural gas and natural gas liquids revenues
For the year ended December 31, 2021, oil, natural gas and natural gas liquids revenues increased by $59.2 million or 150% compared to 2020. The average realized price per Boe increased 96% from $23.58 for the year ended December 31, 2020 to $46.24 for the year ended December 31, 2021. The total volume of oil, natural gas and natural gas liquids produced and sold increased 461 MBoe or 28 % primarily due to an increase in recompleting and new drilling activity in 2021.
Lease operating expenses (“LOE”)
Lease operating expenses consist of the costs of producing crude oil and natural gas such as labor, supplies, repairs, maintenance, water disposal, workovers and utilities.

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For the year ended December 31, 2021, LOE increased by $7.3 million or 65% compared to 2020, primarily due to increased production and associated activity and price increases for services.
Transportation and processing costs
Transportation and processing costs for the year ended December 31, 2021 increased by $2.4 million or 74% compared to 2020, as result of an increase in production volumes.
Ad valorem taxes
Ad valorem taxes for the year ended December 31, 2021 decreased by $0.2 million or 24% compared to 2020, as result of a change to the decline curve used by tax appraisers and changes in commodity price.
Production taxes
Production taxes for the year ended December 31, 2021 increased by $2.8 million or 174% compared to 2020, as result of increased commodity prices and increased volumes.
Depreciation, depletion and amortization (“DD&A”)
DD&A increased for the year ended December 31, 2021 by $4.3 million, or 26% compared to 2020, primarily due to adding production through new drilling and recompletions. This expense category includes depletion expense pertaining to Stronghold’s oil and natural gas properties, and depreciation expense pertaining to its fixed assets located in its headquarters and field locations. For the year ended December 31, 2021, Stronghold’s total DD&A rate per BOE was $9.90 compared to prior year of $10.05.
Impairment expense
During the years ended December 31, 2021 and 2020, Stronghold recorded no impairments related to proved properties, and $1.8 million and $.01 million in exploration and abandonment costs related to dry hole costs and associated impairment to unproved properties.
Exploration and abandonment costs
Exploration and abandonment costs for the year ended December 31, 2021 increased by $1.4 million or 191% compared to 2020 almost entirely due to abandoning projects in non-core areas.
Asset retirement obligation accretion
Asset retirement obligation accretion increased by $0.09 million or 10% for 2021, compared to 2020, primarily due to additional wells added.
Operating lease expense
Operating lease expense increased by $0.4 million or 71% for 2021, compared to 2020, primarily due to additional rental equipment required for well maintenance.
General and administrative expense (“G&A”)
G&A expense consist primarily of payroll related and other administrative expenses to support Stronghold’s operations. G&A increased by $1.2 million for the year ended December 31, 2021, relative to the comparable period in 2020, primarily due to increased compensation expenses.
Interest expense
Interest expense includes commitment fees, amortization of deferred financing costs, and interest on outstanding indebtedness. Interest expense increased for the year ended December 31, 2021, relative to the comparable period in 2020, primarily due to increased debt used for the drilling and recomplete program.

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Gain (loss) on derivative contracts
For the year ended December 31, 2021, Stronghold recorded a net loss on derivative contracts of $31.1 million, consisting of net realized losses on settlements of $20.6 million as well as unrealized mark-to-market losses of $10.5 million. For the year ended December 31, 2020, Stronghold recorded a net loss on derivative contracts of $3.8 million, consisting of unrealized mark-to-market losses of $4.3 million, partially offset by net realized gains on settlements of $0.5 million. This change is related to an increase in commodity prices in 2021.
Other income (expense)
Other income (expense) increased by $0.8 million or 96% for 2021, compared to 2020, primarily due to a reduction in losses from asset sales.
Contractual Obligations
Stronghold had the following contractual obligations and commitments as of December 31, 2021:
in thousands)​​2022​​2023​​2024​​2025​​Thereafter​​Total​
Operating leases​​​$510​​​​$520​​​​$85​​​​​—​​​​​​​$1,115​​
Six months ended June 30, 2022 compared to the six months ended June 30, 2021.
​​​
Six Months Ended
June 30,
​​​​​​​
​���​2022​​2021​​Change​
Sales volumes (MBoe)(1)
​​​​1,370​​​​​914​​​​​456​​
Average daily production (Boe per day)​​​​7,567​​​​​5,049​​​​​2,518​​
Average prices realized (per Boe)​​​$70.31​​​​$39.94​​​​$30.38​​
Average prices adjusted for realized derivatives settlements (per Boe)​​​​55.96​​​​​31.52​​​​​24.44​​
(In thousands)​​​​​​​​​​​​​​​​​​​
Oil, natural gas and natural gas liquids revenues​​​$96,327​​​​$36,502​​​​$59,825​​
Lease operating expenses(2)
​​​​14,648​​​​​8,210​​​​​6,438​​
Transportation and processing costs​​​​3,741​​​​​2,523​​​​​1,218​​
Ad valorem taxes(2)
​​​​1,402​​​​​432​​​​​970​​
Production taxes​​​​4,631​​​​​1,631​​​​​3,000​​
Depreciation, depletion and amortization​​​​14,845​​​​​9,190​​​​​5,655​​
Exploration and abandonment costs​​​​57​​​​​202​​​​​(145)​​
Asset retirement obligation accretion​​​​543​​​​​432​​​​​111​​
Operating lease expense(2)
​​​​614​​​​​510​​​​​104​​
General and administrative expense(2)
​​​​3,572​​​​​2,890​​​​​682​​
Interest expense​​​​1,721​​​​​889​​​​​832​​
Gain (loss) on derivative contracts​​​​(34,126)​​​​​(22,161)​​​​​(11,965)​​
Other income (expense)​​​​66​​​​​85​​​​​(19)​​
​
(1)
Barrels of oil equivalent have been calculated on the basis of six Mcf of natural gas equals one Boe.
​
(2)
Note that for purposes of discussion and analysis, Ad valorem taxes and Operating lease expense were split from Lease operating expenses and General and administrative expense. Lease operating expenses for the six months ended June 30, 2022 consists of Stronghold’s reported amount of $16,408 less $1,402 in ad valorem taxes and $358 in operating lease expense. Lease operating expenses for the six months ended June 30, 2021 consists of Stronghold’s reported amount of $8,905 less $432 in ad
​

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valorem taxes and $263 in operating lease expense. General and administrative expense for the six months ended June 30, 2022 consists of Stronghold’s reported amount of $3,828 less $256 in operating lease expense. General and administrative expense for the six months ended June 30, 2021 consists of Stronghold’s reported amount of $3,137 less $247 in operating lease expense.
Oil, natural gas and natural gas liquids revenues
For the six months ended June 30, 2022, oil, natural gas and natural gas liquids revenues increased by $59.8 million or 164% compared to the corresponding period in 2021. Stronghold’s average realized price per Boe increased 76% from $39.94 for the six months ended June 30, 2021 to $70.31 for the six months ended June 30, 2022. The total volume of oil and natural gas produced and sold increased 456 MBoe or 50% primarily due to increased production from recompletes and new drills.
Lease operating expenses (“LOE”)
LOE includes all costs incurred to operate wells and related facilities for both operated and non-operated properties. In addition to direct operating costs such as labor, repairs and maintenance, re-engineering and workovers, equipment rentals, materials and supplies, fuel and chemicals, LOE includes insurance and overhead charges provided for in operating agreements.
LOE increased by $6.4 million or 78% for the six months ended June 30, 2022, compared to the corresponding period in 2021, primarily due to increased production and associated activity and price increases for services.
Transportation and processing costs
Transportation and processing costs increased by $1.2 million or 48% for the six months ended June 30, 2022, compared to the corresponding period in 2021, primarily due to increased production.
Ad valorem taxes
Ad valorem taxes increased by $1.0 million or 225% for the six months ended June 30, 2022, compared to the corresponding period in 2021, primarily due to an increase in commodity prices and adding new production.
Production taxes
Production taxes for the six months ended June 30, 2022 increased by $3.0 million or 184% relative to the comparable period in 2021 due to an increase in commodity prices causing net taxable values to increase across all product types. As a percentage of revenues from oil, natural gas, and natural gas liquids, production taxes remained relatively flat in 2022 compared to the comparable period in 2021.
Depreciation, depletion and amortization (“DD&A”)
DD&A for the six months ended June 30, 2022 increased by $5.7 million or 62% relative to the comparable period in 2021, primarily due to an increase in production related to new drills and recompletes. For the six months ended June 30, 2022 and 2021, the total DD&A rate per BOE was $10.84 and $10.05, respectively.
Impairment expense
During the six months ended June 30, 2022 and 2021, Stronghold recorded no impairments related to proved or unproved properties.
Exploration and abandonment costs
Exploration and abandonment costs decreased by $0.1 million or 72% for the six months ended June 30, 2022, compared to the corresponding period in 2021, primarily due to a reduction in temporarily abandoned well costs.

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Asset retirement obligation accretion
Asset retirement obligation accretion increased by $0.1 million or 26% for the six months ended June 30, 2022, relative to the comparable period in 2021, primarily due to additional wells added.
Operating lease expense
Operating lease expense increased by $0.1 million or 20% for the six months ended June 30, 2022, compared to the corresponding period in 2021, primarily due to additional rental equipment required for well maintenance.
General and administrative expense (“G&A”)
These expenses consist primarily of employee remuneration, professional and consulting fees and other overhead expenses. G&A increased by $0.7 million for the six months ended June 30, 2022 relative to the comparable period in 2021.
Interest expense
Interest expense includes commitment fees, amortization of deferred financing costs, and interest on outstanding indebtedness. Interest expense increased for the six months ended June 30, 2022 relative to the comparable period in 2021, primarily due to increased debt used for the drilling and recomplete program.
Gain (loss)on derivative contracts
For the six months ended June 30, 2022, Stronghold recorded a net loss on derivative contracts of $34.1 million, consisting of net realized losses on settlements of $19.6 million and unrealized mark-to-market losses of $14.5 million. For the six months ended June 30, 2021, Stronghold recorded a net loss on derivative contracts of $22.2 million, consisting of unrealized mark-to-market losses of $14.5 million and net realized losses on settlements of $7.7 million.
Other income (expense)
Other income (expense) decreased by $0.02 million or 22% for the six months ended June 30, 2022, compared to the corresponding period in 2021, primarily due to a reduction in vehicle income.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The following table sets forth as of January 2, 2013,certain information regardingfurnished by Company management and others, concerning the ownership of the Company’s outstanding shares of common stockCommon Stock by (i) each person who is known to managementthe Company to own, beneficially orbe the beneficial owner of record, more than 5%five percent of the outstanding shares of our Common Stock,Stock; (ii) each director ofall directors and named executive officers; and (iii) the Company, (iii) each executive officer of the Company, and (iv) allCompany’s directors and executive officers as a group. The mailing address for each of the officers and directors in the table below is the Company’s corporate headquarters. The percentage ownership is based on shares outstanding as of September 1, 2022.
Beneficial ownership is determined under the rules of the SEC. In general, these rules attribute beneficial ownership of securities to persons who possess sole or shared voting power and/or investment power with respect to those securities and includes, among other things, securities that an individual has the right to acquire within 60 days. Unless otherwise indicated, the stockholders identified in the following table have sole voting and investment power with respect to all shares shown as beneficially owned by them.
​​​
Shares of Common Stock
Beneficially Owned
​​
Shares of Common Stock
Owned upon Preferred
Stock Conversion
​
Name of Executive Officer and Directors​​Number​​Percentage​​Number​​Percentage​
Paul D. McKinney​​​​319,355​​​​​*​​​​​319,355​​​​​*​​
Travis T. Thomas​​​​106,351​​​​​*​​​​​106,351​​​​​*​​
Stephen D. Brooks​​​​135,176​​​​​*​​​​​135,176​​​​​*​​
Marinos C. Baghdati​​​​135,176​​​​​*​​​​​135,176​​​​​*​​
Alexander Dyes​​​​135,176​​​​​*​​​​​135,176​​​​​*​​
Clayton E. Woodrum​​​​243,144​​​​​*​​​​​243,144​​​​​*​​
Anthony B. Petrelli​​​​358,296​​​​​*​​​​​358,296​​​​​*​​
Regina Roesener​​​​170,696​​​​​*​​​​​170,696​​​​​*​​
John A. Crum​​​​97,096​​​​​*​​​​​97,096​​​​​*​​
Richard E. Harris​​​​97,096​​​​​*​​​​​97,096​​​​​*​​
Thomas L. Mitchell​​​​97,096​​​​​*​​​​​97,096​​​​​*​​
Roy Ben-Dor​​​​—​​​​​—​​​​​—​​​​​—​​
David Habachy​​​​—​​​​​—​​​​​—​​​​​—​​
All directors and executive officers as a group (13 persons)​​​​1,894,658​​​​​1.5%​​​​​1,894,658​​​​​1.1%​​
5% Stockholders or Greater Stockholders (other than directors and executive officers)​​​​​​​​​​​​​​​​​​​​​​​​​
Dr. Simon G. Kukes Group(8)
​​​​5,307,500​​​​​4.1%​​​​​5,307,500​​​​​3.1%​​
William R. Kruse(9)
​​​​13,846,948​​​​​10.6%​​​​​13,846,948​​​​​8.0%​​
Jack Yetiv(10)
​​​​7,650,310​​​​​5.9%​​​​​7,650,310​​​​​4.4%​​
Stronghold Energy II Operating, LLC(11)
​​​​21,339,986​​​​​16.3%​​​​​63,888,889​​​​​36.9%​​
​
*
Represents beneficial ownership of less than 1%
​
(1)
The percentage is based upon 130,581,374 shares of Common Stock issued and outstanding as of September 1, 2022.
​
(2)
Includes 35,700 Common Stock warrants to purchase shares of Common Stock on a one-to-one basis at an exercise price of $0.80 per share that expire on October 29, 2025.
​
(3)
Represents the following number of shares of restricted Common Stock that will vest within 60 days of September 1, 2022: Mr. McKinney — 100,000; Mr. Thomas — 50,000; Mr. Brooks — 66,667; Mr. Baghdati — 66,667; Mr. Dyes — 66,667; and all directors and named executive officers as a group — 350,001.
​
(4)
Includes 85,000 shares issuable upon the exercise of stock options that are currently exercisable.
​

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(5)
Includes 50,000 shares issuable upon the exercise of stock options that are currently exercisable.
​
(6)
Includes 8,000 shares of Common Stock held by Eugene Neidiger Life Insurance Trust. Does not include 850 shares of Common Stock held as custodian for minor-son but has no pecuniary interest or 850 shares of Common Stock held as custodian but has no pecuniary interest. Ms. Roesener disclaims beneficial ownership of such shares of Common Stock.
​
(7)
Includes 195,000 shares issuable upon the exercise of stock options that are currently exercisable. Also includes 35,700 Common Stock warrants to purchase shares of Common Stock on a one-to-one basis at an exercise price of $0.80 per share and expire on October 29, 2025.
​
(8)
Based on a Schedule 13D/A filed with the SEC on September 20, 2021 reporting shares of Common Stock beneficially owned by Mr. Simon G. Kukes and Mr. J. Douglas Schick. Dr. Kukes reports sole voting and dispositive power over 5,300,000 shares of Common Stock and Mr. Schick reports sole voting and dispositive power over 7,500 shares. The address of the reporting person is 575 N. Dairy Ashford, Energy Center II, Suite 210, Houston, Texas 77079.
​
(9)
Based on a Schedule 13D filed with the SEC on February 4, 2022 reporting shares of Common Stock beneficially owned by Mr. William R. Kruse and Mrs. Deborah L. Kruse. Mr. Kruse reports sole voting and dispositive power over 1,014,300 shares. Mr. and Mrs. Kruse report shared voting and dispositive power over 12,925,434 shares in accounts as joint tenants with right of survivorship. Mr. Kruse also has 1,000,000 Common Stock warrants to purchase shares of Common Stock on a one-to-one basis at an exercise price of $0.80 per share and expire on October 29, 2025. Mr. Kruse owns 14,300 shares of Common Stock in his individual account with sole voting and investment control. The address of the reporting persons is 1340 S. Main Street, Suite 300, Grapevine, Texas 76051.
​
(10)
Based on the Schedule 13G filed with the SEC on June 1, 2021 reporting shares of Common Stock beneficially owned by Mr. Jack Yetiv. The address of the reporting person is 10120 Westview Drive, Suite 2110, Houston, Texas 77043.
​
(11)
Based on the Schedule 13D filed with the SEC on September 12, 2022 by: Stronghold Energy II Operating, LLC, Stronghold Energy II Intermediate, LLC, Stronghold Energy II Holdings, LLC, Warburg Pincus Energy (E&P)-A, L.P., WP Energy Stronghold Holdings, L.P., WP Energy Partners Stronghold Holdings, L.P., Warburg Pincus Energy (E&P) Partners-B Stronghold, LLC, Warburg Pincus Energy (E&P) Partners-A, L.P., Warburg Pincus Private Equity (E&P) XII (A), L.P., Warburg Pincus Private Equity (E&P) XII-D (A), L.P., Warburg Pincus Private Equity (E&P) XII-E (A), L.P., WP XII (E&P) Partners (A), L.P., WP XII (E&P) Partners (B), L.P., WP XII Stronghold Holdings, L.P., Warburg Pincus XII (E&P) Partners-1, L.P., Warburg Pincus (E&P) XII, L.P., Warburg Pincus (E&P) XII LLC, Warburg Pincus XII (E&P) Partners-2, L.P., Warburg Pincus XII (E&P) Partners-2 Stronghold, LLC, Warburg Pincus Energy (E&P) Partners-B, L.P., Warburg Pincus Partners II (US), L.P., Warburg Pincus & Company US, LLC, Warburg Pincus (E&P) Energy LLC, Warburg Pincus (E&P) Energy GP, L.P. Warburg Pincus & Co., and Warburg Pincus LLC. Certain of these reporting persons collectively hold a majority of the membership interest in Stronghold Holdings. Each of the reporting persons other than Stronghold OpCo disclaims beneficial ownership of the securities reported therein, except to the extent of its pecuniary interest therein, and the report shall not be deemed an admission that the reporting persons are the beneficial owners of such securities for purposes of Section 16 or for any other purposes. The address of each of the Stronghold entities is 508 West Wall Street, Suite 550, Midland, Texas 79701. The address of each of the Warburg entities is c/o Warburg Pincus LLC, 450 Lexington Avenue, New York, NY 10017.
​

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DESCRIPTION OF CAPITAL STOCK
The following is a description of our capital stock and a summary of the rights of our stockholders. This description and summary is not complete, and you should also refer to our Articles of Incorporation and Bylaws, each as amended, and to Nevada law.
We are authorized to issue up to 225,000,000 shares of Common Stock, par value $0.001 per share, and up to 50,000,000 shares of preferred stock, par value $0.001 per share. As of January 2, 2013, a total of 14,166,011September 1, 2022, there were 130,581,374 shares of our Common Stock wereissued and outstanding, 153,176 shares of Preferred Stock issued and outstanding and no shares of other series of preferred stock issued or outstanding. The addressAll outstanding shares of Common Stock and Preferred Stock are fully paid and nonassessable.
Common Stock
Voting Rights
Holders of our Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote, except as matters that relate only to a series of our preferred stock. Holders of Common Stock do not have cumulative voting rights.
Each outstanding share of voting capital stock of the Company shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders, except as otherwise provided in the Articles of Incorporation of the Company. Except as otherwise provided by the corporation law of the State of Nevada, the Articles of Incorporation of the Company or the Bylaws of the Company, if a quorum is present: (a) directors shall be elected by a plurality of the votes of the shares of capital stock of the Company present in person or represented by proxy at the meeting and entitled to vote on the election of directors; and (b) action on any matter other than the election of directors shall be approved if the votes cast by the holders of shares represented at the meeting and entitled to vote on the subject matter favoring the action exceed the votes cast opposing such action.
Our Board of Directors is elected annually at the meeting of our stockholders. Each director holds office until the next annual meeting of our stockholders at which his term expires and until his successor is elected and qualified, or until his earlier death, resignation or removal.
Any action that the stockholders could take at a meeting may be taken without a meeting if one or more written consents, setting forth the action taken, shall be signed and dated, before or after such action, by the holders of outstanding stock of each voting group entitled to vote thereon having not less than the minimum number of votes with respect to each voting group that would be necessary to authorize or take such action at a meeting at which all voting groups and shares entitled to vote thereon were present and voted. The consent shall be delivered to us for inclusion in the minutes or filing with the corporate records. We will give notice of any action so taken within 10 days of the individualsdate of such action to those stockholders entitled to vote thereon who did not give their written consent and to those stockholders not entitled to vote thereon.
According to the Company’s Articles of Incorporation, the authority to adopt, amend or repeal our Bylaws is reserved exclusively to the Board of Directors.
Liquidation
In the event of a liquidation, dissolution or winding up, each outstanding share of Common Stock entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for any class of stock, if any, having preference over the Common Stock.
Dividend Rights
The Board of Directors may from time to time declare, and we may pay, dividends on our outstanding shares in the manner and upon the terms and conditions provided by the corporation law of the State of Nevada.

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We have not declared or paid any cash dividends on our Common Stock during the last five years. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.
Redemption
Our Common Stock is not redeemable.
Conversion Rights
Our Common Stock is not convertible.
Preemptive Rights
Holders of our Common Stock do not have preemptive rights.
Transfer Agent
The transfer agent and registrar for our Common Stock is Standard Registrar and Transfer Company. Its address is 12528 South 1840 East, Draper, Utah 84020, and its telephone number is (801) 571-8844.
Listing
Our Common Stock is listed belowon the NYSE American under the symbol “REI.”
This section is c/o Ring Energy, Inc.a summary and may not describe every aspect of our Common Stock that may be important to you. We urge you to read applicable Nevada law, our Articles of Incorporation and Bylaws, as amended, because they, and not this description, define your rights as a holder our Common Stock. See “Where You Can Find More Information” for information on how to obtain copies of these documents.
Anti-Takeover Provisions of Our Charter Documents and Bylaws
Sections 78.378 to 78.3793 of the Nevada Revised Statutes, (“NRS”), 6555 South Lewis Street, Tulsa, Oklahoma 74136.


Name and Address of Beneficial Owners

 

Amount and Nature of

Beneficial Ownership(1)

 

 

Percent of Shares

Outstanding

William Randy Broaddrick (2)

 

 

70,000

 

 

 

 

*

 

 

 

Robert J. Morley

 

 

170,000

 

 

 

1.20

%

 

 

 

Denny Nestripke (3)

 

 

58,000

 

 

 

 

*

 

 

 

 

 

 

 

 

 

Michael Harland

 

 

25,000

 

 

 

 

*

 

 

 

 

 

 

 

 

 

L. Tim Rochford (4)

 

 

2,736,724

 

 

 

19.29

%

 

 

 

 

 

 

 

 

 

Stanley M. McCabe (5)

 

 

1,821,592

 

 

 

12.84

%

 

 

 

All directors and executive officers as a group (6 persons)

 

 

4,881,316

 

 

 

34.31

%

*Lesscontain provisions that may prevent any person acquiring a controlling interest in a Nevada company from exercising voting rights. Under NRS Sections 78.378 to 78.3793, an acquiring person who acquires a controlling interest in a company’s common shares may not exercise voting rights on any of these shares unless these voting rights are granted by a majority vote of our disinterested stockholders at a special stockholders’ meeting held upon the request and at the expense of the acquiring person. We have expressly opted-out of, or elect not to be governed by, the “Acquisition of Controlling Interest” provisions contained in NRS Sections 78.378 through 78.3793, inclusive, or any successor statutes.

Board Vacancies Are Generally Filled by Remaining Directors and Not Stockholders
Our Bylaws provide that any vacancies on the Board of Directors may be filled by the vote of the majority of the remaining directors, although less than 1%.


(1)

This table is based upon information supplied by officers, directors and principal stockholders and is believed to be accurate.  Unless otherwise indicated in the footnotes to this table, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.  Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.  Shares of common stock subject to options, warrants, or other conversion privileges currently exercisable or convertible, or exercisable or convertible within 60 days of the date of this table, are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.  Where more than one person has a beneficial ownership interest in the same shares, the sharing of beneficial ownership of these shares is designated in the footnotes to this table.  At January 2, 2013, we had 14,166,011 shares of Common Stock outstanding.

(2)

Includes 20,000 shares issuable upon exercise of outstanding options.

(3)

Includes 30,000 shares held in an IRA and 2,000 shares held in a brokerage account.



a quorum. Notwithstanding the immediately preceding sentence, the Board of Directors may by resolution determine that any such vacancies or newly created directorships shall be filled by our stockholders representing at least one-third (1/3) of the issued and outstanding shares of our capital stock that would be entitled to vote at a meeting of stockholders.

Stockholder Meetings

(4)

Includes 20,000 shares issuable upon exercise of outstanding options.  Includes 272,057 shares held by a foundation controlled by Mr. Rochford.  Also includes 2,220,000 shares held by a family trust controlled by Mr. Rochford.

(5)

Includes 20,000 shares issuable upon exercise of outstanding options.  Includes 37,500 shares held by Mr. McCabe’s spouse.  Also includes 1,646,502 shares held by a family trust controlled by Mr. McCabe.


EXECUTIVE COMPENSATION


The following table sets forth information concerning the annual compensation awarded to, earnedBylaws provide that a special meeting of stockholders, other than those required by Nevada law, may be called by or paid toat the named executive officers for all services rendered in all capacities to our company for the years ended December 31, 2012 and 2011:


SUMMARY COMPENSATION TABLE


Name & Principal Position

Year


Salary


Bonus

Option Awards (1)

All Other Compensation

Total

William Randy Broaddrick, Interim CEO and Interim CFO (2)

2012



$108,333.30 (3)



$3,000



$213,711 (4)

$0

$325,044.30

 

2011

$0

$0

$232,156 (5)

$0

$232,156

Robert “Steve” Owens, CEO (2)


2012


$0


$0


$0


$2,000 (6)


$2,000

 

2011

$0

$0

$0

$3,000 (6)

$3,000


(1)

The estimated value of options awarded was determined in accordance with FASB ASC 718.  Amounts reported do not reflect amounts actually received by the officer.

(2)

On August 31, 2012, Robert “Steve” Owens resigned as a director and as Chief Executive Officer, Chief Financial Officer and as Presidentrequest of the Company.  Also on August 31, 2012, William R. Broaddrick was appointed asChairman of the InterimBoard or the Chief Executive Officer, and Interim Chief Financial Officer.

(3)

The Company has agreed to pay Mr. Broaddrick a yearly salary of $125,000.  $49,999.98 of salary earned by Mr. Broaddrick was earned under the arrangement with the Company and $58,333.32 of the salary earned by Mr. Broaddrick was earned under an arrangement with Stanford Energy, Inc. prior to the acquisition of Stanfordshall be called by the Company.

(4)

On September 1, 2012, Mr. Broaddrick was granted 50,000 options with 20% vesting onSecretary at the anniversarywritten request of, the grant date for five years.  The exercise price of the options is $4.50.

(5)

On December 1, 2011, Mr. Broaddrick was granted 100,000 options with 20% vesting on the anniversary of the grant date for five years. The exercise price of the options is $2.00.

(6)

We did not have an employment agreement with Mr. Owens and the Board of Directors had notor by resolution adopted any compensation policy for Mr. Owens.  We paid himby, a director fee of $250 per month beginning in 2010.





Equity Awards


OUTSTANDING EQUITY AWARDS

As at December 31, 2012


 

 

Stock Awards

 

Name

 

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

 

Equity
Incentive
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

 

Option
Exercise
Price
($)

 

Option
Expiration
Date

 

William Randy Broaddrick

 

 

20,000

 

 

 

-

 

 

 

2.00

 

 

12/1/21

 

 

 

 

-

 

 

 

80,000

 

 

 

2.00

 

 

12/1/21

 

 

 

 

-

 

 

 

50,000

 

 

 

4.50

 

 

9/1/22

 


On June 27, 2012, our Board of Directors adopted the Ring Energy, Inc. Long Term Incentive Plan (the “Plan”).  The material features of the Plan have been summarized above.


The Company has not entered into any contract, agreement, plan, or arrangement, either written or unwritten, that provides for payments to a names executive officer at, following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of the Company or a change in the named executive officer’s responsibilities following a change in control, with respect to each named executive officer.


Director Compensation


The following table sets forth certain information concerning the compensation of our directors, excluding any named executive officer, for the last fiscal year ended December 31, 2012:


 

 

 

Name

Fees Earned or Paid in Cash

Total

Michael Harland

$0

$0

Stanley McCabe

$0

$0

Robert Morley

$0

$0

Lloyd Tim Rochford

$0

$0

Denny Nestripke

$12,000(1)

$12,000


(1)

Mr. Nestripke, who serves as Chairmanmajority of the Board of Directors receives a fixed feeor the holders of $1,000 per month.


Directors are permitted to receive fixed fees and other compensation for their services as directors.  The Board of Directors has the authority to fix the compensation of directors.  The Board of Directors has not adopted a compensation policy for directors except for the attendance at formal meetings of the Board of Directors, for which directors shall receive $350 for each half-day session and $500 for each full-day session.  However, no compensation shall be paid for telephonic or other type of meetings.





CHANGE OF CONTROL


On June 28, 2012, we completed the acquisition of Stanford Energy, Inc., a Texas corporation (“Stanford”), through the closing of the Stock-for-Stock Exchange Agreement dated May 3, 2012, among our Company, Stanford and the sole shareholders of Stanford, L. Tim Rochford and Stanley McCabe (the “Exchange Agreement”).  As a result of the closing of this acquisition, Stanford became a wholly owned subsidiary of our Company.


At the closing we issued 2,220,000 common shares to Mr. Rochford and 1,220,000 common shares to Mr. McCabe in exchange for all10% of the outstanding shares of Stanford.  In addition, we assumed and adopted Stanford’s equity compensation plan and its outstanding optionscapital stock entitled to purchase 450 shares of Stanford common stock, which now represents the right to purchase up to 1,125,000 shares of our common stock at $2.00 per share.  The options vestvote at the ratemeeting.

Undesignated Preferred Stock
The ability to authorize undesignated preferred stock makes it possible for our Board of 20% each year over five years beginning one year from December 1, 2011, the date they were originally granted,Directors to designate and expire ten years beginning from that date.  Messrs. Rochford and McCabe each own 40 Stanford options which are each exercisable for 100,000 of our common shares following closing.


In connection with the closing we also appointed Messrs. Rochford and McCabe, who were officers and directors of Stanford, as directors of Ring.


In connection with the closing of the acquisition of Stanford as described above, we issued an aggregate of 3,440,000 shares to Messrs. Rochford and McCabe which represented approximately 34% of the outstanding voting shares of the Company.


We are currently not aware of any arrangements the operation of which may at a subsequent date result in a change in control of the Company.


DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS


We will only deliver one Consent Solicitation Statement to multiple shareholders sharing an address, unless we have received contrary instructions fromissue, without stockholder approval, one or more series of such shareholders.  Also, we will promptly deliverpreferred stock with voting or


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other rights or preferences that could make it more difficult to effect or that could prevent a separate copychange of this Consent Solicitation Statement and future shareholder communication documents to any shareholder at a shared address to which a single copy of this Consent Solicitation Statement was delivered, or deliver a single copy of this Consent Solicitation Statement and future shareholder communication documents to any shareholder or shareholders sharing an address to which multiple copies are now delivered, upon written request to us at our address noted above.


Shareholders also may address future requests regarding delivery of Consent Solicitation Statements, proxy statements and annual reports by contacting us at the address noted above.


STOCKHOLDER PROPOSALS


There are no proposals by any security holder which are or could have been included within this consent solicitation.


We did not hold an annual meeting of shareholders for the fiscal year ended December 31, 2012 and, as such, the deadline for submitting shareholder proposals for inclusion in our proxy statement for our next annual meeting will be a reasonable time before we begin printing and distributing our proxy materials for our next annual meeting.


All shareholder proposals should be submitted to the attentioncontrol of our Secretary atCompany or the addressremoval of our principal executive offices.  We urge youmanagement.

Requirements for Advance Notification of Stockholder Nominations and Proposals
Our Bylaws establish advance notice procedures with respect to submit any such proposalstockholder proposals and the nomination of candidates for election as directors.
Preferred Stock
General
Our preferred stock may be issued from time to time by a means which will permit proof of the date of delivery, such as certified mail, return receipt requested.


By Order of theour Board of Directors


Denny Nestripke

Vice President





APPENDIX A


CERTIFICATE OF AMENDMENT

TO THE

ARTICLES OF INCORPORATION

OF

RING ENERGY, INC.


The Articles of Incorporation, as amended, of Ring Energy, Inc., a Nevada corporation, are hereby amended as follows:


1.

The Article numbered “FOURTH” of the Articles of Incorporation is amended in its entirety to read as follows:


The corporation is authorized to issue two classes of shares to be designated, respectively, “Common Stock” and “Preferred Stock.”  The total number of shares the corporation is authorized to issue is Two Hundred million (200,000,000).  The number of shares of Common Stock authorized is one hundred fifty million (150,000,000) shares, par value $0.001 per share.  The number of shares of Preferred Stock authorized is fifty million (50,000,000) shares, par value $0.001.


a)

Common Stock.  All rights accruing to the outstanding shares of the corporation not expressly provided for to the contrary herein or in the By-Laws of the corporation,more classes or in any amendment hereto or thereto, shall be vested in the Common Stock.


b)

Preferred Stock.series. Except as otherwise provided herein or required by law, the Board of Directors is hereby vested with the authority to provide, out of the unissued shares of Preferred Stock,preferred stock, for one or more additional classes or series of Preferred Stockpreferred stock and, with respect to each such class or series, to prescribe the classes, series and the number of each class or series of Preferred Stockpreferred stock and the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of Preferred Stock.


2.

preferred stock.

The Article numbered “TENTH”issuance of shares of preferred stock, or the issuance of rights to purchase shares of preferred stock, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holders to block such a transaction; or the issuance might facilitate a business combination by including voting rights that would provide a required percentage vote of the Articlesstockholders. In addition, under some circumstances, the issuance of Incorporationpreferred stock could adversely affect the voting power of the holders of the Common Stock. Although our Board of Directors is amended inrequired to make any determination to issue preferred stock based on its entiretyjudgment as to read as follows:  


The authority to adopt, amend or repeal bylaws is reserved exclusively tothe best interests of our stockholders, the Board of Directors.


3.

The Article numbered “TWELFTH”Directors could act in a manner that would discourage an acquisition attempt or other transaction that some or a majority of the Articlesstockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of Incorporationthe stock. The Board of Directors does not currently intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or the rules of any market on which our securities are traded.

Series A Convertible Preferred Stock
Reference is amendedmade to “Proposal One — Approval of Conversion of Preferred Stock into Common Stock — Description of Preferred Stock” that describes our Series A Convertible Preferred Stock that we issued at the closing of the Stronghold Acquisition as described in this proxy statement. The Certificate of Designation for our Series A Convertible Preferred Stock prohibits our issuance of other series of preferred stock without Stronghold’s consent. The Preferred Stock is fully paid and nonassessable. The rights of the holders of the Preferred Stock are subordinate to the rights of our general creditors. The Preferred Stock has priority over the Common Stock as to dividend, liquidation and redemption rights.
The transfer agent for the Preferred Stock is that of our Common Stock, identified above.
OTHER MATTERS
No business other than that set forth in the attached notice of Special Meeting is expected to come before the Special Meeting. However, should any other matters requiring a vote of stockholders arise, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interest of the Company.
PROXY SOLICITATION AND COSTS
It is expected that the solicitation of proxies for the Special Meeting will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company, by telephone or by other means of communication at nominal cost. The Company will bear the cost of such solicitation. It will reimburse banks, brokers and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy material to beneficial owners of stock in accordance with the NYSE schedule of charges.

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The Company will bear the entire cost of this solicitation of proxies for the Special Meeting, including the preparation, assembly, printing and mailing of this proxy statement, the proxy card and any additional solicitation material that the Company may provide to stockholders. Copies of solicitation material will be provided to brokerage firms, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners. Further, the original solicitation of proxies by mail may be supplemented by solicitation by telephone and other means by directors, executive officers and employees of the Company. No additional compensation will be paid to these individuals for any such services. The Company will also post its entiretyproxy materials relating to readthe Special Meeting to its website under “Investors.”
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to “incorporate by reference” into this proxy statement the information we file with them, which means that we can disclose important information to you by referring you to those documents. Any statement contained or incorporated by reference in this proxy statement shall be deemed to be modified or superseded for purposes of this proxy statement to the extent that a statement contained herein, or in any subsequently filed document which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded shall not be deemed, except as follows:

so modified or superseded, to constitute a part of this proxy statement. We incorporate by reference the documents listed below:

•

Except

our Annual Report on Form 10-K for the fiscal year ended December 31, 2021;
​
•
our Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2022 and March 31, 2022;
​
•
our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 28, 2022;
​
•
our Current Reports on Form 8-K filed on July 8, 2022, August 9, 2022, and September 6, 2022, and Form 8-K/A filed on September 12, 2022; and
​
•
the description of our capital stock as otherwise providedset forth as Exhibit 4.2 in our Annual Report on Form 10-K, filed with the SEC on March 16, 2022.
​
All documents that we file (but not those that we furnish) with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement and before the date of the Special Meeting are incorporated by statutereference in this proxy statement from the date of filing of the documents, unless we specifically provide otherwise. Information that we file with the SEC will automatically update and may replace information previously filed with the SEC.
You may obtain, without charge, a directorcopy of any of the documents incorporated by reference in this proxy statement, other than exhibits to those documents that are not specifically incorporated by reference into those documents, by writing or officertelephoning us at the following address: Ring Energy, Inc., 1725 Hughes Landing Blvd., Suite 900 The Woodlands, Texas 77380, phone number 281-397-3699.
Information contained on our website, www.ringenergy.com is not individually liableincorporated by reference in, and does not constitute part of, this proxy statement.
WHERE YOU CAN FIND MORE INFORMATION
The Company is subject to the corporation or itsinformational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, files reports and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding the Company and other registrants that file electronically with the SEC at http://www.sec.gov.
AVAILABILITY OF FORM 10-K AND ANNUAL REPORT TO STOCKHOLDERS
Copies of our 2022 Annual Report to Stockholders and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (not including exhibits and documents incorporated therein by reference), are available without charge to stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that:


c)

The director’s or officer’s act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and


d)

The breach of those duties involved intentional misconduct, fraud or a knowing violation of law.








APPENDIX B


RING ENERGY, INC.

LONG-TERM INCENTIVE PLAN


(as adopted pursuantupon written request to the Stock-for-Stock Exchange Agreement dated May 3, 2012 and by unanimous written consentCompany at Ring Energy, Inc., 1725 Hughes Landing Blvd., Suite 900, The Woodlands, Texas 77380, Attn: Investor Relations.


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ANNEX B
MIZUHO FAIRNESS OPINION

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CONFIDENTIAL​
July 1,2022
The Board of Directors of Ring Energy, Inc.
1725 Hughes Landing Boulevard
Suite 900
The Woodlands, TX 77380
Members of the Board of Directors dated June 27, 2012)


Scope and PurposeDirectors:

You have requested our opinion as to the fairness, from a financial point of view, to Ring Energy, Inc. (the “Purchaser”) of the Plan


Ring Energy, Inc., a Nevada corporation (the “Corporation”), has adopted this Long-Term Incentive Plan (the “Plan”) to provideTransaction Consideration (as defined below) provided for under the granting of:


(a)

Incentive Options to certain Employees (Section 5);


(b)

Nonstatutory Options to certain Employees, Non-employee Directors and other persons (Section 5); and


(c)

Restricted Stock Awards to certain Employees, Non-employee Directors and other persons (Section 6).


The purposeterms of the Plan isPurchase Agreement (the “Proposed Agreement”), to provide an incentive for Employees, directorsbe entered into by and certain consultantsamong the limited liability company interest holders and advisorspartnership interest holders of Stronghold Energy II Operating LLC and Stronghold Energy II Royalties LP (together, the Corporation or its Subsidiaries to remain in“Seller”), and the service of the Corporation or its Subsidiaries, to extend to them the opportunity to acquire a proprietary interest in the Corporation so that they will apply their best efforts for the benefit of the Corporation, and to aid the Corporation in attracting able persons to enter the service of the Corporation and its Subsidiaries.


SECTION 1.

DEFINITIONS


AsPurchaser. Capitalized terms used in this Plan, the following termsherein shall have the meanings set forth below:


1.1

“Award” meansused in the grant of any form of Option or Restricted Stock Award under the Plan, whether granted singly, in combination, or in tandem, to a Holder pursuantLatest Draft Agreement (as defined below) unless otherwise defined herein.

The Proposed Agreement provides, among other things, that, subject to the terms and conditions specified therein, at the Closing, the Seller will sell, and limitations that the Committee may establishPurchaser will acquire, the Seller’s oil and gas producing Central Basin Platform assets located in orderthe Permian Basin, comprising approximately 36,000 net acres located primarily in Crane County, Texas (the “Assets”), through, among other things, the Seller’s and its Controlled Affiliates sale, conveyance, assignment, and transfer to fulfill the objectivesPurchaser, and the Purchaser’s purchase, acquisition and acceptance of, the Plan.


1.2

“Award Agreement” meansTransferred Assets (collectively, the written document or agreement delivered“Acquisition”). As consideration for the Assets, the Purchaser will pay to Holder evidencing the terms, conditions and limitations of an Award that the Corporation granted to that Holder.


1.3

“Board of Directors” means the board of directors of the Corporation.


1.4

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutionsSeller, in the Stateaggregate, (i) $235,000,000, including $15,000,000 of Nevada are authorized or obligated by law or executive order to close.


1.5

“Cause,” with respect to any Holder shall mean:  (a) Holder’s conviction of, or plea of guilty or nolo contendere to, a crime involving dishonesty, fraud, or unethical business conduct, or any felony of any nature whatsoever, (b) Holder’s willful misconduct, (c) Holder’s breach of fiduciary duty which involves personal profit, (d) Holder’s willful disobedience of Corporate policy, (e) Holder’s willful disobedience of a material directive from a supervising officer and/or the Board of Directors, or (f) Holder’s abuse of illegal drugs or other controlled substances, or habitual intoxication.  No act or failure to act, by the Holder shall be considered “willful” unless committed in bad faithDeferred Cash Consideration, and without a reasonable belief that the act or omission was(ii) either (x) in the best interestsevent Pre-Closing Stockholder Approval is obtained, 63,888,889 shares of the Corporation or its clients. Notwithstanding the foregoing, in the case of any Holder who, subsequent to the effective date of this Plan, enters into an employment agreement with the Corporation or any Subsidiary that contains the definition of “cause” (or any similar definition), then during the term of such employment agreement the definition contained in such Employment Agreement shall be the applicable definition of “cause” under the Plan as to such Holder if such Employment Agreement expressly so provides.




1.6

“Change in Control” means the occurrence of any of the following events [other than any of the following events which involve Ring Energy, Inc., a Nevada corporation, or any affiliate or associate thereof (as those terms are defined in Rule 12b-2 under the Exchange Act for purposes of this definition only), such events specifically not constituting a Change of Control]:


(i)

The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (x) the then outstandingfully paid and nonassessable shares of Common Stock, of the Corporation (the “Outstanding Corporation Common Stock”) or (y) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the electionevent that Pre-Closing Stockholder Approval is not obtained, 21,339,986 shares of directors (the “Outstanding Corporation Voting Securities”);provided,however, that for purposesfully paid and nonassessable shares of this subsection (i), the following acquisitions shall not constitute a Change of Control:  (A) any acquisition directly from the Corporation, (B) any acquisition by the Corporation, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of paragraph (iii) below; or


(ii)

Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board of Directors; or


(iii)

Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation or an acquisition of assets of another corporation (a “Business Combination”), in each case,unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding153,176 shares of common stockfully paid and nonassessable shares of Preferred Stock (collectively, the combined voting power“Transaction Consideration”). Pursuant to the terms of the then outstanding voting securities entitledProposed Agreement, the Transaction Consideration is subject to vote generallycertain adjustments and potential indemnification claims.

Mizuho Securities USA LLC (“MSUSA”), as part of its investment banking services, is regularly engaged in the electionvaluation of directors,businesses and their securities in connection with mergers and acquisitions, corporate restructurings, underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes.
We are acting as financial advisor to the case may be,Purchaser in connection with the Acquisition, and we will receive a fee for our services payable upon the delivery by MSUSA of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation, or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately priorthis opinion to such Business Combination, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the case may be,and (B) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of  the action of the Board, providing for such Business Combination; or


(iv)

Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.


1.7

“Code” means the Internal Revenue Code of 1986, as amended.


1.8

“Committee” means the Board of Directors of the Corporation Purchaser (the “Board”), which is not contingent upon the successful completion of the Acquisition. In addition, the Purchaser has agreed to indemnify us for certain liabilities that may arise out of our engagement and to reimburse certain of our reasonable out-of-pocket expenses incurred by us in performing our services. MSUSA and/or its affiliates may in the future provide investment banking and other financial services to the Purchaser, the Seller and their respective affiliates for which we would expect to receive compensation.

In the ordinary course of business, MSUSA and its affiliates may act as a committee appointed pursuantmarket maker and broker in the publicly traded securities of the Purchaser and receive customary compensation in connection therewith. MSUSA and its affiliates are also engaged in advisory, underwriting, financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons, all or some of which may involve or otherwise relate to Section 3the Purchaser, the Seller or any of their respective affiliates. MSUSA, its affiliates and their respective employees, including any funds or other entities they manage or which they invest in or have other economic interests in, may at any time purchase, sell, hold or vote long or short positions and investments (for their own account or for the accounts

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of their respective customers) in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Purchaser, the Seller, any of their respective affiliates and third parties, or any currency or commodity that may be involved in the transaction contemplated by the Proposed Agreement.
For the purposes of rendering our opinion, we have undertaken such review and inquiries as we deemed necessary or appropriate under the circumstances, including the following: (i) we reviewed the financial terms of the draft, dated June 26, 2022, of the Proposed Agreement (the “Latest Draft Agreement”); (ii) we reviewed and analyzed certain financial and other data with respect to the business operated by the Seller related to the Assets (the “Business”) and the business operated by the Purchaser (the “Purchaser Business”) and certain other relevant historical operating data relating to the Business made available to us from the internal records of the Seller, all of which were approved for our use by the Purchaser and the Board; (iii) we reviewed certain financial estimates, projections and forecasts of the Business (“Forecasts”), prepared by the management of the Purchaser and which were approved for our use by the Purchaser and the Board; (iv) we conducted discussions with members of the senior management of the Purchaser with respect to the business prospects and financial outlook of the Business; (v) we reviewed and analyzed certain financial metrics of certain publicly-traded companies with businesses comparable to the Business and the financial terms, to the extent publicly available, of certain comparable asset transactions; (vi) we analyzed the value of the Common Stock by reference to publicly available market prices, including (A) the 52-week high and low prices; (B) the 20-day volume-weighted average price (“VWAP”); and (C) the closing price on June 30, 2022; and (vii) we performed other studies and analyses, and considered such factors, as we deemed appropriate.
In rendering our opinion, we have, with the Purchaser’s and the Board’s consent, assumed and relied upon the accuracy and completeness of all of the financial, legal, tax, operating, regulatory, accounting and other information provided to or discussed with us by the Purchaser (including, without limitation, the financial statements and related notes thereto of the Business and the Purchaser Business) or reviewed by us in connection with our engagement, and have not assumed responsibility for independently verifying and have not independently verified such information. We have assumed, with the Purchaser’s and the Board’s consent, that all Forecasts provided to us by the management of the Purchaser were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the future financial performance of the Business, as a standalone entity, as of the time these estimates were prepared. We express no opinion as to such Forecasts or the assumptions upon which they were based.
We have not been requested to, and did not, (i) initiate any discussions with, or solicit any indications of interest from, third parties with respect to the Business or any alternatives to the Acquisition, or (ii) advise the Board or any other party with respect to alternatives to the Acquisition.
We have relied upon and assumed, at the direction of the Purchaser and with the consent of the Board, that if Preferred Stock is issued in connection with the Acquisition it will convert to Common Stock prior to December 22, 2022.
In rendering our opinion, we have not assumed any responsibility to perform, and have not performed, an independent evaluation or appraisal of any of the assets or liabilities of the Business, the Seller or any of its subsidiaries, the Purchaser Business or the Purchaser or any of its subsidiaries, and we have not been furnished with any such valuations or appraisals. We have not assumed any obligation to conduct, and have not conducted, any physical inspection of the property or facilities of the Business or the Purchaser Business. We have not investigated, and make no assumption regarding, any litigation or other claims affecting the Business or the Purchaser Business. We have not investigated, and make no assumption, regarding the solvency of the Business, the Purchaser Business, the Purchaser, the Seller or any of their respective affiliates nor the impact (if any) on such solvency on the financing for the Acquisition.
We have assumed that all governmental, regulatory and other consents and approvals necessary for the consummation of the transactions contemplated by the Proposed Agreement will be obtained without any adverse effect on the expected benefits of the Acquisition. We have assumed that the transactions contemplated by the Proposed Agreement will be consummated on the terms set forth in the Latest Draft Agreement without the waiver or modification of any term or condition contained therein.

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Our opinion speaks only as of the date hereof, is based on the conditions as they exist and information which we have been supplied as of the date hereof, and is without regard to any market, economic, financial, legal, or other circumstances or event of any kind or nature which may exist or occur after such date. We have not undertaken to reaffirm or revise this opinion or otherwise comment upon events occurring after the date hereof and do not have an obligation to update, revise or reaffirm this opinion. As you are aware, the credit, financial and stock markets have been experiencing unusual volatility and we express no opinion or view as to any potential effects of such volatility on the Business, the Purchaser Business or the transaction contemplated by the Proposed Agreement.
The opinion expressed herein is provided for the information and assistance of the Board in connection with the Acquisition. All advice and opinions (written and oral) rendered by MSUSA are intended for the sole use and benefit of the Board and are not intended to, and do not, confer any rights or remedies upon any other person. Such advice or opinions may not be reproduced, summarized, excerpted from or referred to in any public document or given to or used in any way by any other person without the prior written consent of MSUSA. The Purchaser has informed us that our opinion will not be provided or described to the Company’s public shareholders and we do not have any reason to know otherwise. If required by applicable law, however, such opinion may be included in any disclosure document filed by the Purchaser with the SEC with respect to the Acquisition; provided, however, that such opinion must be reproduced in full and that any description of or reference to MSUSA must be in a form reasonably acceptable to MSUSA and its counsel. MSUSA shall have no responsibility for the form or content of any such disclosure document, other than the opinion itself.
Our opinion does not address the merits of the underlying decision by the Purchaser to engage in the Acquisition or the relative merits of the Acquisition compared to any alternative business strategy or transaction in which the Purchaser might engage and is not a recommendation as to how the Board or any stockholder of the Purchaser should vote or act with respect to any matters relating to the Acquisition, or whether to proceed with the Acquisition or any related transaction. Our opinion does not address the impact of the Acquisition on the solvency or viability of the Purchaser, the Seller or any of their respective affiliates, the Business or the Purchaser Business or the ability of the Purchaser, the Seller or any of their respective affiliates, the Business or the Purchaser Business to pay their respective obligations when they come due.
Our opinion addresses solely the fairness of the Transaction Consideration, from a financial point of view, to the Purchaser. Our opinion does not in any way address any terms or arrangements of the Acquisition or the Proposed Agreement other than the Transaction Consideration, including, without limitation, the financial or other terms of any other agreement contemplated by, or to be entered into in connection with, the Proposed Agreement or the consummation of the Acquisition. In addition, our opinion does not address any legal, tax, accounting or regulatory matters. Further, in rendering our opinion we express no opinion about the fairness of the amount or nature of the compensation to any of the Seller’s officers, directors or employees, or class of such persons or to any securityholders, creditors or other constituencies of the Seller.
Our opinion has been approved by a fairness opinion committee of MSUSA.
Based on our experience as investment bankers and subject to the foregoing, including the various assumptions and limitations set forth herein, it is our opinion that, as of the date hereof, the Transaction Consideration is fair, from a financial point of view, to the Purchaser.
Very truly yours,
Mizuho Americas
/s/ Victor Barcot
Victor Barcot, Managing Director

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FORM OF PROXYSPECIAL MEETING OF THE STOCKHOLDERS OFRING ENERGY, INC.PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSThe Board of Directors recommends a vote FOR all of the Proposals.Proposal 1FOR AGAINSTABSTAINTo approve, pursuant to administer this Plan.


1.9

“Common Stock” meansNYSE American Listing Rule 712(b), the Corporation’s authorizedissuance of 42,548,903 shares of common stock, par value $0.001 per share, upon conversion of 153,176 shares of Series A Convertible Preferred Stock, par value $0.001 per share, as described in the Corporation’s Articles of Incorporation.


1.10

“Corporation” means Ring Energy, Inc., a Nevada corporation.


1.11

“Date of Grant” hasaccompanying Proxy Statement dated _________, 2022. •••Proposal 2FOR AGAINSTABSTAINTo authorize the meaning given it in Section 4.3.


1.12

“Disability” has the meaning given it in Section 8.5.


1.13

“Effective Date” means the date upon which this Plan shall be approved by the Board of Directorsadjournment of the Corporation.  




1.14

“Eligible Individuals” means (a) Employees, (b) Non employee DirectorsSpecial Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve and (c) anyadopt the proposal listed above.•••To act upon such other Person thatmatters as may properly come before the Committee designates as eligible for an Award (other than for Incentive Options) because the Person performs bona fide consulting or advisory services for the CorporationSpecial Meeting or any of its Subsidiaries (other than services in connection with the offeradjournment(s) or sale of securities in a capital raising transaction).


1.15

“Employee” means any employee of the Corporation or of any of its Subsidiaries, including officerspostponement(s) thereof.MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING: •MARK HERE FOR ADDRESS CHANGE • New Address (if applicable):____________________________________________________________________________________IMPORTANT: Please print your name and directors of the Corporation who are also employees of the Corporation or of any of its Subsidiaries.


1.16

“Exchange Act” means the Securities Exchange Act of 1934,sign exactly as amended.


1.17

“Exercise Notice” has the meaning given it in Section 5.5.


1.18

“Exercise Price” has the meaning given it in Section 5.4.


1.19

“Fair Market Value” means, for a particular day, the value determined in good faith by the Committee, which determination shall be conclusive for all purposes of this Plan.


For purposes of valuing Incentive Options, the Fair Market Value of Stock:  (i) shall be determined without regard to any restriction other than one that, by its terms, will never lapse; and (ii) will be determined as of the time the option with respect to such Stock is granted.


1.20

“Holder” means an Eligible Individual to whom an Award has been granted.


1.21

“Incentive Option” means an incentive stock option as defined under Section 422 of the Code and regulations thereunder.


1.22

“Incumbent Board” means the individuals who, as of the Effective Date, constitute the Board of Directors and any other individual who becomes a director of the Corporation after that date and whose election was approved by stockholders holding a majority of the Voting Securities or (in the case of a vacancy in the board) by appointment by the Board of Directors, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.


1.23

[reserved]


1.24

“Non-employee Director” means a director of the Corporation who while a director is not an Employee.


1.25

“Nonstatutory Option” means a stock option that does not satisfy the requirements of Section 422 of the Code or that is designated at the Date of Grant or in the applicable Option Agreement to be an option other than an Incentive Option.


1.26

“Non-Surviving Event” means an event of Restructure as described in either subparagraph (b) or (c) of Section 1.32.


1.27

“Option Agreement” means an Award Agreement for an Incentive Option or a Nonstatutory Option.


1.28

“Option” means either an Incentive Option or a Nonstatutory Option, or both.





1.29

“Person” means any person or entity of any nature whatsoever, specifically including (but not limited to) an individual, a firm, a company, a corporation, a limited liability company, a partnership, a trust or other entity. A Person, together with that Person’s affiliates and associates (as those terms are defined in Rule 12b-2 under the Exchange Act for purposes of this definition only), and any Persons acting as a partnership, limited partnership, joint venture, association, syndicate or other group (whether or not formally organized), or otherwise acting jointly or in concert or in a coordinated or consciously parallel manner (whether or not pursuant to any express agreement), for the purpose of acquiring, holding, voting or disposing of securities of the Corporation with that Person, shall be deemed a single “Person.”


1.30

“Plan” means the Ring Energy, Inc. Long-Term Incentive Plan, as it may be amended from time to time.


1.31

“Restricted Stock Award” means the grant or purchase,your name appears on the terms and conditions that the Committee determines or on the terms and conditions of Section 6, of Stock that is nontransferable or subject to substantial risk of forfeiture until specific conditions are met.


1.32

“Restructure” means the occurrence of any one or more of the following:


(a)

The merger or consolidation of the Corporation with any Person, whether effected as a single transaction or a series of related transactions, with the Corporation remaining the continuing or surviving entity of that merger or consolidation and the Stock remaining outstanding and not changed into or exchanged for stock or other securities of any other Person or of the Corporation, cash or other property;


(b)

The merger or consolidation of the Corporation with any Person, whether effected as a single transaction or a series of related transactions, with (i) the Corporation not being the continuing or surviving entity of that merger or consolidation or (ii) the Corporation remaining the continuing or surviving entity of that merger or consolidation but all or a part of the outstandingattached label. When shares of Stock are changed into or exchanged for stock or other securities of any other Person or the Corporation, cash, or other property; or


(c)

The transfer, directly or indirectly, of all or substantially all of the assets of the Corporation (whether by sale, merger, consolidation, liquidation or otherwise) to any Person whether effected as a single transaction or a series of related transactions.


1.33

“Retirement” means the separation of the Holder from employment with the Corporation and its Subsidiaries on account of retirement.


1.34

“Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act, or any successor rule, as it may be amended from time to time.


1.35

“Section 409A” means Section 409A of the Code and the rules and regulations adopted from time to time thereunder, or any successor law or rule as it may be amended from time to time.


1.36

“Securities Act” means the Securities Act of 1933, as amended.


1.37

“Stock” means Common Stock, or any other securities that are substituted for Stock as provided in Section 7.


1.38

“Subsidiary” means, with respect to any Person, any corporation, limited partnership, limited liability company or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.


1.39

[reserved]


1.40

“Voting Securities” means any securities that are entitled to vote generally in the election of directors or in the selection of any other similar governing body.





SECTION 2.

SHARES OF STOCK SUBJECT TO THE PLAN


2.1

Maximum Number of Shares.  Subject to the provisions of Section 7 of this Plan, the maximum aggregate number of shares of Stock in respect of which Awards may be granted for all purposes under the Plan shall be 2,500,000; and provided, further, that if any shares of Stock subject to an Award are forfeited or if any Award based on shares of Stock is otherwise terminated without issuance of such shares of Stock or other consideration in lieu of such shares of Stock, the shares of Stock subject to such Award shall to the extent of such forfeiture or termination, again be available for Awards under the Plan if no participant shall have received any benefits of ownership in respect thereof.


2.2

Description of Shares.  The shares to be delivered under the Plan shall be made available from (a) authorized but unissued shares of Stock, (b) Stock held in the treasury of the Corporation, or (c) previously issued shares of Stock reacquired by the Corporation, including shares purchased on the open market, in each situation as the Board of Directors or the Committee may determine from time to time at its sole option.


SECTION 3.

ADMINISTRATION OF THE PLAN


3.1

Committee.  The Committee shall administer the Plan with respect to all Eligible Individuals or may delegate all or part of its duties under this Plan to a subcommittee or any executive officer of the Corporation, subject in each case to such conditions and limitations as the Board of Directors may establish.


3.2

Committee’s Powers.  Subject to the express provisions of the Plan and any applicable law with which the Corporation intends the Plan to comply, the Committee shall have the authority, in its sole and absolute discretion, (a) to adopt, amend and rescind administrative and interpretive rules and regulations relating to the Plan, including without limitation to adopt and observe such procedures concerning the counting of Awards against the Plan and individual maximums as it may deem appropriate from time to time; (b) to determine the Eligible Individuals to whom, and the time or times at which, Awards shall be granted; (c) to determine the amount of cash and the number of Options, shares of Stock or Restricted Stock Awards, or any combination thereof, that shall be the subject of each Award; (d) to determine the terms and provisions of each Award Agreement (which need not be identical), including provisions defining or otherwise relating to (i) the term and the period or periods and extent of exercisability of the Options, (ii) the extent to which the transferability of shares of Stock issued or transferred pursuant to any Award is restricted, (iii) the effect of termination of employment on the Award, and (iv) the effect of approved leaves of absence (consistent with any applicable regulations of the Internal Revenue Service); (e) to accelerate, pursuant to Section 7, the time of exercisability of any Option that has been granted or the time of vesting or settlement of any Restricted Stock Award; (f) to construe the respective Award Agreements and the Plan; (g) to make determinations of the Fair Market Value of the Stock pursuant to the Plan; (h) to delegate its duties under the Plan to such agents as it may appoint from time to time, subject to Section 3.1; and (i) to make all other determinations, perform all other acts, and exercise all other powers and authority necessary or advisable for administering the Plan, including the delegation of those ministerial acts and responsibilities as the Committee deems appropriate subject in all respects to the last two sentences of Section 5.10.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement in the manner and to the extent it deems necessary or desirable to carry the Plan into effect, and the Committee shall be the sole and final judge of that necessity or desirability.  The determinations of the Committee on the matters referred to in this Section 3.2 shall be final and conclusive.  The Committee shall not have the power to terminate or materially modify or materially amend the Plan.  Those powers are vested in the Board of Directors.





3.3

Transferability of Awards.  Notwithstanding any limitation on a Holder’s right to transfer an Award, the Committee may (in its sole discretion) permit a Holder to transfer an Award, or may cause the Corporation to grant an Award that otherwise would be granted to an Eligible Individual, in any of the following circumstances:  (a) pursuant to a qualified domestic relations order, (b) to a trust established for the benefit of the Eligible Individual or one or more of the children, grandchildren or spouse of the Eligible Individual; (c) to a limited partnership or limited liability company in which all the interests are held by joint tenants, both should sign. When signing as an executor, administrator, attorney, trustee or guardian, please give your full title as such. If the Eligible Individualsigner is a company, please provide the full name of the company and that Person’s children, grandchildren or spouse; or (d) to another Person in circumstances thata signature from a duly authorized officer, giving the Committee believes will resultofficer’s full title as such. If your shares are held at a brokerage house, please indicate in the Award continuing to provide an incentive forspace provided the Eligible Individual to remain in the servicename of the Corporation or its Subsidiaries and apply his or her best efforts for the benefit of the Corporation or its Subsidiaries.  If the Committee determines to allow such transfers or issuances of Awards, any Holder or Eligible Individual desiring such transfers or issuances shall make application therefor in the manner and time that the Committee specifies and shall comply with such other requirements as the Committee may require to assure compliance with all applicable laws, including securities laws, and to assure fulfillment of the purposes of this Plan.  The Committee shall not authorize any such transfer or issuance if it may not be made in compliance with all applicable federal and state securities laws.  The granting of permission for such an issuance or transfer shall not obligate the Corporation to register the shares of Stock to be issued under the applicable Award.


SECTION 4.

ELIGIBILITY AND PARTICIPATION


4.1

Eligible Individuals.  Awards may be granted pursuant to the Plan only to persons who are Eligible Individuals at the time of the grant thereof or in connection with the severance or retirement of Eligible Individuals.


4.2

Grant of Awards.  Subject to the express provisions of the Plan, the Committee shall determine which Eligible Individuals shall be granted Awards from time to time. In making grants, the Committee shall take into consideration the contribution the potential Holder has made or may make to the success of the Corporation or its Subsidiaries and such other considerations as the Board of Directors may from time to time specify. The Committee shall also determine the number of shares or cash amounts subject to each of the Awards and shall authorize and cause the Corporation to grant Awards in accordance with those determinations.


4.3

Date of Grant.  The date on which an Award is granted (the “Date of Grant”) shall be the date specified by the Committee as the effective date or date of grant of an Award or, if the Committee does not so specify, shall be the date as of which the Committee adopts the resolution approving the offer of an Award to an individual, including the specification of the number (or method of determining the number) of shares of Stock and the amount (or method of determining the amount) of cash to be subject to the Award, even though certain terms of the Award Agreement may not be determined at that time and even though the Award Agreement may not be executed or delivered until a later time. In no event shall a Holder gain any rights in addition to those specified by the Committee in its grant, regardless of the time that may pass between the grant of the Award and the actual execution or delivery of the Award Agreement by the Corporation or the Holder.  An Award shall be valid and binding upon execution by the Corporation and the Holder, the Committee may invalidate an Award at any time prior to execution by both the Corporation and the Holder, and such Award shall be treated as never having been granted.


4.4

Award Agreements.  Each Award granted under the Plan shall be evidenced by an Award Agreement that incorporates those terms that the Committee shall deem necessary or desirable. More than one Award may be granted under the Plan to the same Eligible Individual and be outstanding concurrently. If an Eligible Individual is granted both one or more Incentive Options and one or more Nonstatutory Options, those grants shall be evidenced by separate Award Agreements, one for each of the Incentive Option grants and one for each of the Nonstatutory Option grants.





4.5

Limitation for Incentive Options.  Notwithstanding any provision contained herein to the contrary, (a) a person shall not be eligible to receive an Incentive Option unless he or she is an Employee of the Corporation or a corporate Subsidiary (but not a partnership or other non-corporate Subsidiary), and (b) a person shall not be eligible to receive an Incentive Option if, immediately before the time the Incentive Option is granted, that person owns (within the meaning of Sections 422 and 424 of the Code) stock possessing more than ten percent of the total combined voting power or value of all classes of stock of the Corporation or a Subsidiary. Nevertheless, this Section 4.5(b) shall not apply if, at the time the Incentive Option is granted, the Exercise Price of the Incentive Option is at least one hundred and ten percent of the Fair Market Value of the Stock underlying the Incentive Option and the Incentive Option is not, by its terms, exercisable after the expiration of five years from the Date of Grant.


4.6

No Right to Award.  The adoption of the Plan shall not be deemed to give any person a right to be granted an Award.


SECTION 5.

TERMS AND CONDITIONS OF OPTIONS


All Options granted under the Plan shall comply with, and the related Option Agreements shall be deemed to include and be subject to, the terms and conditions set forth in this Section 5 (to the extent each term and condition applies to the form of Option) and also to the terms and conditions set forth in Section 7.1 and Section 8;provided,however, that the Committee may authorize an Option Agreement that expressly contains terms and provisions that differ from the terms and provisions of Section 8.  The Committee may also authorize an Option Agreement that contains any or all of the terms and provisions of Sections 7.2 and 7.3 or that contains terms and provisions dealing with similar subject matter differently than do those Sections; nevertheless, the terms and provisions of Section 7.2 or 7.3 (or any such differing term or provision) shall apply to an Option Agreement unless the Option Agreement expressly states that such term or provision shall not apply.


5.1

Number of Shares.  Each Option Agreement shall state the total number of shares of Stock to which it relates.


5.2

Vesting.  Each Option Agreement shall state the time, periods or other conditions on which the right to exercise the Option or a portion thereof shall vest and the number (or method of determining the number) of shares of Stock for which the right to exercise the Option shall vest at each such time, period or satisfaction of condition.


5.3

Expiration of Options.  Nonstatutory Options and Incentive Options may be exercised during the term determined by the Committee and set forth in the Option Agreement;provided that no Incentive Option shall be exercised after the expiration of a period of ten (10) years commencing on the Date of Grant of the Incentive Option.


5.4

Exercise Price.  Each Option Agreement shall state the exercise price per share of Stock (the “Exercise Price”).  The exercise price per share of Stock subject to an Incentive Option shall not be less than the greater of (a) the par value per share of the Stock or (b) 100% of the Fair Market Value per share of the Stock on the Date of Grant of the Option.  The exercise price per share of Stock subject to a Nonstatutory Option shall not be less than the greater of (a) the par value per share of the Stock or (b) 100% of the Fair Market Value per share of the Stock on the Date of Grant of the Option.


5.5

Method of Exercise.  Each Option shall be exercisable only by written, recorded electronic or other notice of exercise in the manner specified by the Committee from time to time (the “Exercise Notice”) delivered to the Corporation or to the Person designated by the Committee during the term of the Option, which notice shall (a) state the number of shares of Stock with respect to which the Option is being exercised, (b) be signed or otherwise given by the Holder of the Option or by the person authorized to exercise the Option in the event of the Holder’s death or disability, (c) be accompanied by payment of the Exercise Price for all shares of Stock for which the Option is exercised, unless provision for the payment of the Exercise Price has been made pursuant to Section 5.7 or 5.8 or in another manner permitted by law and approved in advance by the Committee, and (d) include such other information, instruments, and documents as may be required to satisfy any other condition to exercise contained in the Option Agreement.  The Option shall not be deemed to have been exercised unless all of the requirements of the preceding provisions of this Section 5.5 have been satisfied.




5.6

Incentive Option Exercises.  During the Holder’s lifetime, only the Holder may exercise an Incentive Option.  The Holder of an Incentive Option shall immediately notify the Corporation in writing of any disposition of the Stock acquired pursuant to the Incentive Option that would disqualify the Incentive Option from the incentive option tax treatment afforded by Section 422 of the Code. The notice shall state the number of shares disposed of, the dates of acquisition and disposition of the shares, and the consideration received upon that disposition.


5.7

Medium and Time of Payment.  The Exercise Price of an Option shall be payable in full upon the exercise of the Option (a) in cash or by an equivalent means (such as that specified in Section 5.8) acceptable to the Committee, (b) on the Committee’s prior consent, with shares of Stock owned by the Holder (including shares received upon exercise of the Option or restricted shares already held by the Holder) and having a Fair Market Value at least equal to the aggregate Exercise Price payable in connection with such exercise, or (c) by any combination of clauses (a) and (b).  If the Committee chooses to accept shares of Stock in payment of all or any portion of the Exercise Price, then (for purposes of payment of the Exercise Price) those shares of Stock shall be deemed to have a cash value equal to their aggregate Fair Market Value determined as of the date of the delivery of the Exercise Notice.  If the Committee elects to accept shares of restricted Stock in payment of all or any portion of the Exercise Price, then an equal number of shares issued pursuant to the exercise shall be restricted on the same terms and for the restriction period remaining on the shares used for payment.


5.8

Limitation on Aggregate Value of Shares That May Become First Exercisable During any Calendar Year Under an Incentive Option.  With respect to any Incentive Option granted under this Plan, the aggregate Fair Market Value of shares of Stock subject to an Incentive Option and the aggregate Fair Market Value of shares of Stock or stock of any Subsidiary (or a predecessor of the Corporation or a Subsidiary) subject to any other incentive stock option (within the meaning of Section 422 of the Code) of the Corporation or its Subsidiaries (or a predecessor corporation of any such corporation) that first become purchasable by a Holder in any calendar year may not (with respect to that Holder) exceed $100,000, or such other amount as may be prescribed under Section 422 of the Code or applicable regulations or rulings from time to time.  As used in the previous sentence, Fair Market Value shall be determined as of the date the Incentive Option is granted.  For purposes of this Section 5.8 “predecessor corporation” means (a) a corporation that was a party to a transaction described in Section 424(a) of the Code (or which would be so described if a substitution or assumption under that Section had been effected) with the Corporation, (b) a corporation which, at the time the new incentive stock option (within the meaning of Section 422 of the Code) is granted, is a Subsidiary of the Corporation or a predecessor corporation of any such corporations, or (c) a predecessor corporation of any such corporations.  Failure to comply with this provision shall not impair the enforceability or exercisability of any Option, but shall cause the excess amount of shares to be reclassified in accordance with the Code.


5.9

No Fractional Shares.  The Corporation shall not in any case be required to sell, issue, or deliver a fractional share with respect to any Option. In lieu of the issuance of any fractional share of Stock, the Corporation shall pay to the Holder an amount in cash equal to the same fraction (as the fractional Stock) of the Fair Market Value of a share of Stock determined as of the date of the applicable Exercise Notice.





5.10

Modification, Extension and Renewal of Options.  Subject to the terms and conditions of and within the limitations of the Plan and any applicable law, and any consent required by the last two sentences of this Section 5.10, the Committee may (a) modify, extend or renew outstanding Options granted under the Plan, (b) accept the surrender of Options outstanding hereunder (to the extent not previously exercised) and authorize the granting of new Options in substitution for outstanding Options (to the extent not previously exercised), and (c) amend the terms of an Incentive Option at any time to include provisions that have the effect of changing the Incentive Option to a Nonstatutory Option.  Notwithstanding anything herein, the Committee may not “reprice” any Option.  “Reprice” means any of the following or any other action that has the same effect: (i) amending an Option to reduce its exercise price, (ii) canceling an Option at a time when its exercise price exceeds the Fair Market Value of a share of Stock in exchange for an Option, Restricted Stock Award or other equity award unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction, or (iii) taking any other action that is treated as a repricing under generally accepted accounting principles,provided that nothing in this Section 5.10 shall prevent the Committee from making adjustments pursuant to Section 7.  Without the consent of the Holder, the Committee may not modify any outstanding Options so as to specify a higher Exercise Price or accept the surrender of outstanding Incentive Options and authorize the granting of new Options in substitution therefor specifying a higher Exercise Price. In addition, no modification of an Option granted hereunder shall, without the consent of the Holder, materially alter or impair any rights of the Holder or materially increase the obligations of a Holder under any Option theretofore granted to that Holder under the Plan except, with respect to Incentive Options, as may be necessary to satisfy the requirements of Section 422 of the Code or as permitted in clause (c) of this Section 5.10.


5.11

Other Agreement Provisions.  The Option Agreements authorized under the Plan shall contain such provisions in addition to those required by the Plan (including, without limitation, restrictions or the removal of restrictions upon the exercise of the Option and the retention or transfer of shares thereby acquired) as the Committee may deem advisable.  Each Option Agreement shall identify the Option evidenced thereby as an Incentive Option or Nonstatutory Option, as the case may be, and no Option Agreement shall cover both an Incentive Option and a Nonstatutory Option.  Each Agreement relating to an Incentive Option granted hereunder shall contain such limitations and restrictions upon the exercise of the Incentive Option to which it relates as shall be necessary for the Incentive Option to which such Agreement relates to constitute an incentive stock option, as defined in Section 422 of the Code.


SECTION 6.

RESTRICTED STOCK AWARDS


All Restricted Stock Awards granted under the Plan shall comply with, and the related Award Agreements shall be deemed to include, and be subject to the terms and conditions set forth in this Section 6 and also to the terms and conditions set forth in Section 7.1 and Section 8;provided, however, that the Committee may authorize an Award Agreement relating to a Restricted Stock Award that expressly contains terms and provisions that differ from the terms and provisions of Section 8.  The Committee may also authorize an Award Agreement relating to a Restricted Stock Award that contains any or all of the terms and provisions of Sections 7.2 and 7.3 or that contains terms and provisions dealing with similar subject matter differently than do those Sections; nevertheless, the terms and provisions of Section 7.2 or 7.3 (or any such differing term or provision) shall apply to an Award Agreement relating to a Restricted Stock Award unless the Award Agreement expressly states that such term or provision shall not apply.


6.1

Restrictions.  All shares of Restricted Stock Awards granted or sold pursuant to the Plan shall be subject to the following conditions:


(a)

Transferability.  The shares may not be sold, transferred or otherwise alienated or hypothecated until the restrictions are removed or expire.


(b)

Conditions to Removal of Restrictions.  Conditions to removal or expiration of the restrictions may include, but are not required to be limited to, continuing employment or service as a director, officer, employee, consultant or advisor or achievement of performance objectives described in the Award Agreement.


(c)

Legend.  Each certificate representing Restricted Stock Awards granted pursuant to the Plan shall bear a legend making appropriate reference to the restrictions imposed.




(d)

Possession.  At its sole discretion, the Committee may (i) authorize issuance of a certificate for shares in the Holder’s name only upon lapse of the applicable restrictions, (ii) require the Corporation, transfer agent or other custodian to retain physical custody of the certificates representing Restricted Stock Awards during the restriction period and may require the Holder of the Award to execute stock powers, endorsed or in blank, for those certificates and deliver those stock powers to the Corporation, transfer agent or custodian, or (iii) may require the Holder to enter into an escrow agreement providing that the certificates representing Restricted Stock Awards granted or sold pursuant to the Plan shall remain in the physical custody of an escrow holder until all restrictions are removed or expire.  The Corporation may issue shares subject to stop-transfer restrictions or may issue such shares subject only to the restrictive legend described in subparagraph 6.1(c).


(e)

Other Conditions.  The Committee may impose other conditions on any shares granted or sold as Restricted Stock Awards pursuant to the Plan as it may deem advisable, including, without limitation, (i) restrictions under the Securities Act or Exchange Act, (ii) the requirements of any securities exchange upon which the shares or shares of the same class are then listed, and (iii) any state securities law applicable to the shares.


6.2

Expiration of Restrictions.  The restrictions imposed in Section 6.1 on Restricted Stock Awards shall lapse as determined by the Committee and set forth in the applicable Award Agreement, and the Corporation shall promptly cause to be delivered to the Holder of the Restricted Stock Award a certificate representing the number of shares for which restrictions have lapsed, free of any restrictive legend relating to the lapsed restrictions; provided that (i) a minimum of a one year restriction period shall exist on all Restricted Stock Awards, and (ii) a minimum of a three year restriction period shall exist with respect to any Restricted Stock Award granted solely by reason of tenure of the Holder (provided that a Restricted Stock Award granted solely by reason of tenure may vest in equal thirds, annually, so long as the minimum restriction period for the first vesting period is at least one year).  Subject to the limitations set forth above, each Restricted Stock Award may have a different restriction period, in the discretion of the Committee.  The Committee may, in its discretion, prospectively reduce the restriction period applicable to a particular Restricted Stock Award in the event of the death, disability or retirement of the Holder.  The foregoing notwithstanding, no restriction not required by law shall remain in effect for more than ten years after the date of the Award.


6.3

[reserved]


6.4

Rights as Stockholder.  Subject to the provisions of Sections 6.1, the Committee may, in its discretion, determine what rights, if any, the Holder shall have with respect to the Restricted Stock Awards granted or sold, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto.


6.5

Other Agreement Provisions.  The Award Agreements relating to Restricted Stock Awards shall contain such provisions in addition to those required by the Plan as the Committee may deem advisable.


SECTION 7.

ADJUSTMENT PROVISIONS


The Committee may authorize an Award that contains any or all of the terms and provisions of this Section 7 or, with respect to Sections 7.2 and 7.3, that contains terms and provisions dealing with similar subject matter differently than do those Sections; nevertheless, the terms and provisions of Section 7.2 or 7.3 (or any such differing term or provision) shall apply to an Award Agreement unless the Award Agreement expressly states that such term or provision shall not apply.





7.1

Adjustment of Awards and Authorized Stock.  The terms of an Awardbrokerage house and the number of shares held.Dated: ________________________, 2022(Print Name of Stock authorized pursuant to Section 2.1 for issuance under the Plan shall be subject to adjustment, from time to time, in accordance with the following provisions:


(a)

If at any time or from time to time, the Corporation shall subdivide as a whole (by reclassification, by a Stock split, by the issuance of a distribution on Stock payable in Stock or otherwise) the number of shares of Stock then outstanding into a greater number of shares of Stock, then (i) the maximum number of shares of Stock available for the Plan as provided in Section 2.1 shall be increased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (ii) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any Award shall be increased proportionately, and (iii) the price (including Exercise Price) for each share of Stock (or other kind of shares or unit of other securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.


(b)

If at any time or from time to time the Corporation shall consolidate as a whole (by reclassification, reverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lesser number of shares of Stock, (i) the maximum number of shares of Stock available for the Plan as provided in Section 2.1 shall be decreased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (ii) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any Award shall be decreased proportionately, and (iii) the price (including Exercise Price) for each share of Stock (or other kind of shares or unit of other securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.


(c)

Whenever the number of shares of Stock subject to outstanding Awards and the price for each share of Stock subject to outstanding Awards are required to be adjusted as provided in this Section 7.1, the Committee shall promptly prepare a notice setting forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the change in price and the number of shares of Stock, other securities, cash or property purchasable subject to each Award after giving effect to the adjustments.  The Committee shall promptly give each Holder such a notice.


(d)

Adjustments under Section 7.1(a) and 7.1(b) shall be made by the Committee, and its determination as to what adjustments shall be made and the extent thereof shall be final, binding and conclusive.  No fractional interest shall be issued under the Plan on account of any such adjustments.


7.2

Changes in Control.  Upon the occurrence of a Change in Control for Awards held by Participants who are employees or directors of the Corporation (and their permitted transferees pursuant to Section 3.3 above):  (a) all outstanding Options shall immediately become fully vested and exercisable in full, including that portion of any Option that pursuant to the terms and provisions of the applicable Award Agreement had not yet become exercisable (the total number of shares of Stock  as to which an Option is exercisable upon the occurrence of a Change in Control is referred to herein as the “Total Shares”); and (b) the restriction period of any Restricted Stock Award shall immediately be accelerated and the restrictions expire.  If a Change in Control involves a Restructure or occurs in connection with a series of related transactions involving a Restructure and if such Restructure is in the form of a Non-Surviving Event and as a part of such Restructure shares of stock, other securities, cash or property shall be issuable or deliverable in exchange for Stock, then the Holder of an Award shall be entitled to purchase or receive (in lieu of the Total Shares that the Holder would otherwise be entitled to purchase or receive), as appropriate for the form of Award, the number of shares of stock, other securities, cash or property, to which such Holder would have been entitled, upon the same terms, conditions and restrictions of the Award as existed immediately before the consummation of the Restructure.  Nothing in this Section 7.2 shall impose on a Holder the obligation to exercise any Award immediately before or upon the Change of Control, and, unless otherwise provided in the Award Agreement relating to the Award, no Holder shall forfeit the right to exercise the Award during the remainder of the original term of the Award because of a Change in Control or because the Holder’s employment is terminated for any reason following a Change in Control.





7.3

Restructure and No Change of Control.  In the event a Restructure should occur at any time while there is any outstanding Award hereunder and that Restructure does not occur in connection with a Change in Control or in connection with a series of related transactions involving a Change in Control, then:


(a)

no outstanding Options shall immediately become fully vested and exercisable in full merely because of the occurrence of the Restructure; and


(b)

the restriction period of any Restricted Stock Award shall not immediately be accelerated nor shall the restrictions expire merely because of the occurrence of the Restructure.


The Corporation shall promptly notify each Holder of any election or action taken by the Corporation under this Section 7.3.  In the event of any election or action taken by the Corporation pursuant to this Section 7.3 that requires the amendment or cancellation of any Award Agreement as may be specified in any notice to the Holder thereof, that Holder shall promptly deliver that Award Agreement to the Corporation in order for that amendment or cancellation to be implemented by the Corporation and the Committee.  The failure of the Holder to deliver any such Award Agreement to the Corporation as provided in the preceding sentence shall not in any manner affect the validity or enforceability of any action taken by the Corporation and the Committee under this Section 7.3, including, without limitation, any redemption of an Award as of the consummation of a Restructure.  Any cash payment to be made by the Corporation pursuant to this Section 7.3 in connection with the redemption of any outstanding Awards shall be paid to the Holder thereof currently with the delivery to the Corporation of the Award Agreement evidencing that Award; provided, however, that any such redemption shall be effective upon the consummation of the Restructure notwithstanding that the payment of the redemption price may occur subsequent to the consummation.  If all or any portion of an outstanding Award is to be exercised upon or after the consummation of a Restructure that is in the form of a Non-Surviving Event and as a part of that Restructure shares of stock, other securities, cash or property shall be issuable or deliverable in exchange for Stock, then the Holder of the Award shall thereafter be entitled to purchase or receive (in lieu of the number of shares of Stock that the Holder would otherwise be entitled to purchase or receive) the number of shares of stock, other securities, cash or property to which such number of shares of Stock would have been entitled, upon the same terms, conditions and restrictions of the Award as existed immediately before the consummation of the Restructure.


7.4

Notice of Change in Control or Restructure.  The Corporation shall attempt to keep all Holders informed with respect to any Change in Control or Restructure or of any potential Change in Control or Restructure to the same extent that the Corporation’s stockholders are informed by the Corporation of any such event or potential event.


SECTION 8.

ADDITIONAL PROVISIONS


8.1

Termination of Employment.  Subject to the last sentence of Section 7.2, if a Holder is an Eligible Individual because the Holder is an Employee and if that employment relationship is terminated for any reason other than Retirement or that Holder’s death or Disability, then the following provisions shall apply to all Awards held by that Holder that were granted because that Holder was an Employee:


(a)

If the termination is by the Holder’s employer, then the following provisions shall apply: (i) if the termination is for Cause, then that portion, if any, of any and all Awards held by that Holder that are not yet exercisable (or for which restrictions have not lapsed) as of the date of termination shall become null and void; provided, however, that the portion, if any, of any and all Awards held by that Holder which are exercisable (or for which restrictions have lapsed) as of the date of such termination shall survive such termination and shall be exercisable by such Holder for a period of the lesser of (A) the remainder of the term of the Award or (B) five (5) business days following the date of such termination; or (ii) if the termination is not for Cause, then that portion, if any, of any and all Awards held by that Holder that are not yet exercisable (or for which restrictions have not lapsed) as of the date of the termination shall become null and void as of the date of the termination;provided,however, that the portion, if any, of any and all Awards held by that Holder which are exercisable (or for which restrictions have lapsed) as of the date of such termination shall survive such termination and shall be exercisable by such Holder for a period of the lesser of (A) the remainder of the term of the Award or (B) 365 days following the date of such termination.




(b)

If such termination is by the Holder, then, unless otherwise agreed to by the Corporation, any and all Awards held by that Holder, whether or not then exercisable and whether or not restrictions thereon have lapsed (except in full), shall become null and void as of the date of the termination.


8.2

Other Loss of Eligibility.  If a Holder is an Eligible Individual because the Holder is serving in a capacity other than as an Employee and if that capacity is terminated for any reason other than the Holder’s death, then that portion, if any, of any and all Awards held by the Holder that were granted because of that capacity which are not yet exercisable (or for which restrictions have not lapsed) as of the date of the termination shall become null and void as of the date of the termination;provided,however, that the portion, if any, of any and all of the Awards held by the Holder that are exercisable (or for which restrictions have lapsed) as of the date of the termination shall survive the termination and shall be exercisable by such Holder for a period of the lesser of (a) the remainder of the term of the Award or (b) 180 days following the date of such termination.


8.3

Death.  Upon the death of a Holder, then any and all Awards held by the Holder, including those portions of the Awards that pursuant to the terms and provisions of the applicable Award Agreement had not yet become exercisable, shall immediately become fully vested and exercisable in full by the Holder, his guardians or his legal representatives, legatees or distributees for a period of the lesser of (a) the remainder of the term of the Award or (b) one year following the date of the Holder’s death.  Any portion of an Award not exercised upon the expiration of the periods specified in (a) or (b) shall be null and void.  Except as expressly provided in this Section 8.3, all Awards held by a Holder shall not be exercisable after the death of that Holder.


8.4

Retirement.  If a Holder is an Eligible Individual because the Holder is an Employee and if that employment relationship is terminated by reason of the Holder’s Retirement, then the portion, if any, of any and all Awards held by the Holder that are not yet exercisable (or for which restrictions have not lapsed) as of the date of that retirement shall become null and void as of the date of retirement;provided,however, that the portion, if any, of any and all Awards held by the Holder that are exercisable as of the date of that Retirement shall survive the Retirement and shall be exercisable by such Holder for a period of the lesser of (a) the remainder of the terms of the Award or (b) 180 days following the date of retirement.


8.5

Disability.  If a Holder is an Eligible Individual because the Holder is an Employee and if that employment relationship is terminated by reason of the Holder’s Disability, then any and all Awards held by the Holder, including those portions of the Awards that pursuant to the terms and provisions of the applicable Award Agreement had not yet become exercisable (or for which restrictions had not lapsed), shall immediately become fully vested and exercisable in full by the Holder, his guardians or his legal representatives for a period of the lesser of (a) the remainder of the term of the Award or (b) one year following the date on which the Holder’s employment is terminated due to such Holder’s Disability. “Disability” shall have the meaning given it in the employment agreement of the Holder;provided,however, that if that Holder has no employment agreement, “Disability” shall mean a physical or mental impairment of sufficient severity that, in the opinion of the Corporation, either the Holder is unable to continue performing the duties he performed before such impairment or the Holder’s condition entitles him to disability benefits under any insurance or employee benefit plan of the Corporation or its Subsidiaries and that impairment or condition is cited by the Corporation as the reason for termination of the Holder’s employment.


8.6

Leave of Absence.  With respect to an Award, the Committee may, in its sole discretion, determine that any Holder who is on leave of absence for any reason will be considered to still be in the employ of the Corporation, provided that rights to that Award during a leave of absence will be limited to the extent to which those rights were earned or vested when the leave of absence began.


8.7

Transferability of Awards.  In addition to such other terms and conditions as may be included in a particular Award Agreement, an Award requiring exercise shall be exercisable during a Holder’s lifetime only by that Holder or by that Holder’s guardian or legal representative.  An Award requiring exercise shall not be transferrable other than by will or the laws of descent and distribution, except as permitted in accordance with Section 3.3.





8.8

Forfeiture and Restrictions on Transfer.  Each Award Agreement may contain or otherwise provide for conditions giving rise to the forfeiture of the Stock acquired pursuant to an Award or otherwise and may also provide for those restrictions on the transferability of shares of the Stock acquired pursuant to an Award or otherwise that the Committee in its sole and absolute discretion may deem proper or advisable.  The conditions giving rise to forfeiture may include, but need not be limited to, the requirement that the Holder render substantial services to the Corporation or its Subsidiaries for a specified period of time,Stockholder and/or agreements regarding non-competition with the Corporation and its Subsidiaries. The restrictions on transferability may include, but need not be limited to, options and rightsJoint Tenant)(Signature of first refusal in favor of the Corporation and stockholders of the Corporation other than the Holder of such shares of Stock who is a party to the particular Award Agreement or a subsequent holder of the shares of Stock who is bound by that Award Agreement.


8.9

Delivery of Certificates of Stock.  Subject to Section 8.10, the Corporation shall promptly issue and deliver a certificate representing the number of shares of Stock as to which (a) an Option has been exercised after the Corporation receives an Exercise Notice and upon receipt by the Corporation of the Exercise Price and any tax withholding as may be requested; and (b) restrictions have lapsed with respect to a Restricted Stock Award and upon receipt by the Corporation of any tax withholding as may be requested.  The value of the shares of Stock, cash or notes transferable because of an Award under the Plan shall not bear any interest owing to the passage of time, except as may be otherwise provided in an Award Agreement.  If a Holder is entitled to receive certificates representing Stock received for more than one form of Award under the Plan, separate Stock certificates shall be issued with respect to each such Award and for Incentive Options and Nonstatutory Stock Options separately.


8.10

Conditions to Delivery of Stock.  Nothing herein or in any Award granted hereunder or any Award Agreement shall require the Corporation to issue any shares with respect to any AwardStockholder)(Second Signature if that issuance would, in the opinion of counsel for the Corporation, constitute a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, as then in effect.  At the time of any exercise of an Option, or at the time of any grant of a Restricted Stock Award, the Corporation may, as a condition precedent to the exercise of such Option or vesting of any Restricted Stock Award, require from the Holder of the Award (or in the event of his or her death, his or her legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the Holder’s intentions with regard to the retention or disposition of the shares of Stock being acquired pursuant to the Award and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Corporation, may be necessary to ensure that any disposition by that Holder (or in the event of the Holder’s death, his legal representatives, heirs, legatees, or distributees) will not involve a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable state or federal statute or regulation, or any rule of any applicable securities exchange or securities association, as then in effect.


8.11

Securities Act Legend.  Certificates for shares of Stock, when issued, may have the following legend, or statements of other applicable restrictions endorsed thereon and may not be immediately transferable:


THE SHARESheld jointly)

TABLE OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE  ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.


This legend shall not be required for shares of Stock issued pursuant to an effective registration statement under the Securities Act, if any.




CONTENTS

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8.12

Legend for Restrictions on Transfer.  Each certificate representing shares issued to a Holder pursuant to an Award granted under the Plan shall, if such shares are subject to any transfer restriction, including a right of first refusal, provided for under this Plan or an Award Agreement, bear a legend that complies with applicable law with respect to the restrictions on transferability contained in this Section 8.12, such as:


THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT ENTITLED “RING ENERGY, INC. LONG-TERM INCENTIVE PLAN” AS ADOPTED BY

RING ENERGY, INC. (THE “CORPORATION”) ON ______________, 20__, AND AN AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND[HOLDER] DATED ___________, ______, AND MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF EXCEPT AS THEREIN PROVIDED.  THE CORPORATION WILL FURNISH A COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.


8.13

Rights as a Stockholder.  A Holder shall have no right as a stockholder with respect to any shares covered by his or her Award until a certificate representing those sharesINC.Special Meeting of Stockholders_______, _____, 2022, __________ a.m. Central TimeThis proxy is issued in his or her name.  No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash or other property) or distributions or other rights for which the record date is before the date that certificate is issued, except as contemplated by Section 7.  Nevertheless, dividends and dividend equivalent rights may be extended to and made part of any Award denominated in Stock or units of Stock, subject to such terms, conditions, and restrictions as the Committee may establish.  The Committee may also establish rules and procedures for the crediting of interestsolicited on deferred cash payments and dividend equivalents for deferred payment denominated in Stock or units of Stock.


8.14

Information.  Each Holder shall furnish to the Corporation all information requested by the Corporation to enable it to comply with any reporting or other requirement imposed upon the Corporation by or under any applicable statute or regulation.


8.15

Obligation to Exercise.  The granting of an Award hereunder shall impose no obligation upon the Holder to exercise the same or any part thereof.


8.16

Adjustments to Awards.  Subject to applicable law and the general limitations set forth in Sections 5, and 7, the Committee may make any adjustment to or the terms of a Nonstatutory Option by canceling an outstanding Nonstatutory Option and regranting a Nonstatutory Option. Such adjustment shall be made by amending, substituting or regranting an outstanding Nonstatutory Option.  Such amendment, substitution or regrant may result in terms and conditions that differ from the terms and conditions of the original Nonstatutory Option. Notwithstanding anything herein, the Committee may not “reprice” any Option.  “Reprice” means any of the following or any other action that has the same effect: (i) amending an Option to reduce its exercise price, (ii) canceling an Option at a time when its exercise price exceeds the Fair Market Value of a share of Stock in exchange for an Option, Restricted Stock Award or other equity award unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction, or (iii) taking any other action that is treated as a repricing under generally accepted accounting principles.  In addition, the Committee may not impair the rights of any Holder to previously granted Nonstatutory Options without that Holder’s consent.  If such action is effected by amendment, the effective date of such amendment shall be the date of the original grant. Notwithstanding the above, with respect to Performance Awards that are subject to Section 409A of the Code, the Committee shall not have the authority to accelerate or postpone the timing or settlement of a Performance Award in a manner that would cause such award to become subject to the interest and penalty provisions under Section 409A of the Code.


8.17

Remedies.  The Corporation and a Holder shall be entitled to recover from the other party reasonable attorneys’ fees incurred in connection with the enforcement of the terms and provisions of the Plan and any Award Agreement whether by an action to enforce specific performance or for damages for its breach or otherwise.




8.18

Information Confidential.  As partial consideration for the granting of each Award hereunder, the Holder shall agree with the Corporation that the Holder will keep confidential all information and knowledge that the Holder has relating to the manner and amount of his or her participation in the Plan;provided,however, that such information may be disclosed as required by law and may be given in confidence to the Holder’s spouse, tax, legal and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan. In the event any breach of this promise comes to the attention of the Committee, it shall take into consideration that breach in determining whether to recommend the grant of any future Award to that Holder, as a factor militating against the advisability of granting any such future Award to that individual.  The provisions of this Section 8.18 shall be included in each Award Agreement.


8.19

Consideration.  No Option shall be exercisable and no restriction on any Restricted Stock Award shall lapse unless and until the Holder shall have paid cash or property to, or performed services for and/or provided value to, the Corporation or any of its Subsidiaries that the Committee believes is equal to or greater in value than the par value of the Stock subject to such Award.


8.20

Payment of Taxes.  The Committee may, in its discretion, require a Holder to pay to the Corporation (or the Corporation’s Subsidiary if the Holder is an employee of a Subsidiary of the Corporation), at the time of the exercise of an Award, the amount that the Committee deems necessary to satisfy the Corporation’s or its Subsidiary’s current or future obligation to withhold federal, state or local income or other taxes that the Holder incurs by exercising an Award.


8.21

Claw-back.  If any Holder is substantially responsible for negligence that materially and negatively impacts the Corporation, an Award benefit realized by such Holder during the period commencing in the two (2) years preceding such negligence will be immediately due and payable by such Holder to the Corporation.   The Holder will be considered substantially responsible if there was a failure to conduct his or her responsibilities with the degree of skill and care an ordinary prudent person in a like position would exercise under similar circumstances.


SECTION 9.

DURATION AND AMENDMENT OF PLAN


9.1

Duration.  No Awards may be granted hereunder after the date that is ten (10) years from the date of this Plan.


9.2

Amendment.  The Board of Directors may (insofar as permitted by law and applicable regulations), with respect to any shares which, at the time, are not subject to Awards, suspend or discontinue the Plan or revise or amend it in any respect whatsoever, and may amend any provision of the Plan or any Award Agreement to make the Plan or the Award Agreement, or both, comply with Section 16(b) of the Exchange Act and the exemptions therefrom, the Code, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the regulations promulgated under the Code or ERISA, or any other law, rule or regulation that may affect the Plan.  The Board of Directors may also amend, modify, suspend or terminate the Plan for the purpose of meeting or addressing any changes in other legal requirements applicable to the Corporation or the Plan or for any other purpose permitted by law.  The Plan may not be amended without the consent of the holders of a majority of the shares of Stock then outstanding to increase materially the aggregate number of shares of Stock that may be issued under the Plan (except for adjustments pursuant to Section 7 of the Plan).


SECTION 10.

GENERAL


10.1

Application of Funds.  The proceeds received by the Corporation from the sale of shares pursuant to Awards shall be used for general corporate purposes.


10.2

Right of the Corporation and Subsidiaries to Terminate Employment.  Nothing contained in the Plan or in any Award Agreement shall confer upon any Holder the right to continue in the employ of the Corporation or any Subsidiary, or interfere in any way with the rights of the Corporation or any Subsidiary to terminate his or her employment at any time.




10.3

No Liability for Good Faith Determinations.  Neither the membersbehalf of the Board of Directors, any memberDirectorsThe undersigned, a stockholder of RING ENERGY, INC. (the “Company”), having received the Notice of Special Meeting of Stockholders and Proxy Statement dated ____, 2022, does hereby appoint Paul D. McKinney and Travis T. Thomas, or either of them as proxy and attorney-in-fact with full power of substitution, for and in the name of the Committee norundersigned to represent the undersigned at the Special Meeting of Stockholders of the Company to be held at the Company’s offices located at 1725 Hughes Landing Blvd., The Woodlands, Texas 77380, on ______, 2022, at ________ a.m. Central Time, or at any individualadjournment or postponement thereof, and to vote all shares of the Company’s voting securities that the Committee has delegated duties to pursuant to Section 3.1. above shall be liable for any act, omission or determination taken or made in good faith with respect to the Plan or any Award granted under it, and members of the Board of Directors and the Committee shallundersigned would be entitled to indemnificationvote if then and reimbursement bythere personally present, on the Corporation in respect of any claim, loss, damagematters set forth on the reverse side, and all such other business as may properly come before the meeting, as designated below. The proxy will be voted as directed, or expense (including attorneys’ fees, the costs of settling any suit, provided such settlementif no contrary direction is approved by independent legal counsel selected by the Corporation,indicated, will be voted FOR Proposals 1 and amounts paid in satisfaction of a judgment, except a judgment based on a finding of bad faith) arising therefrom to the full extent permitted by law2, and under any directors and officers liability or similar insurance coverage that may from time to time be in effect.  This right to indemnification shall be in addition to, and not a limitation on, any other indemnification rights any member ofas the Board of Directors or the Committee may have.


10.4

Other Benefits.  Participation in the Plan shall not preclude the Holder from eligibility in any other stock or stock option plan of the Corporation or any Subsidiary or any old age benefit, insurance, pension, profit sharing, retirement, bonus or other extra compensation plans that the Corporation or any Subsidiary has adopted or may, at any time, adopt for the benefit of its Employees.  Neither the adoption of the Plan by the Board of Directors nor the submission of the Plan to the stockholders of the Corporation for approval shall be construed as creating any limitationsrecommend on the power of the Board of Directors to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options and the awarding of stock and cash otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.


10.5

Exclusion from Pension and Profit-Sharing Compensation.  By acceptance of an Award (whether in Stock or cash), as applicable, each Holder shall be deemed to have agreed that the Award is special incentive compensation that will not be taken into account in any manner as salary, compensation or bonus in determining the amount of any payment under any pension, retirement or other employee benefit plan of the Corporation or any Subsidiary.  In addition, each beneficiary of a deceased Holder shall be deemed to have agreed that the Award will not affect the amount of any life insurance coverage, if any, provided by the Corporation or a Subsidiary on the life of the Holder that is payable to the beneficiary under any life insurance plan covering employees of the Corporation or any Subsidiary.


10.6

Execution of Receipts and Releases.  Any payment of cash or any issuance or transfer of shares of Stock or other property to the Holder, or to his legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Committee may require any Holder, legal representative, heir, legatee or distributee, as a condition precedent to such payment, to execute a release and receipt therefor in such form as it shall determine.


10.7

Unfunded Plan.  Insofar as it provides for Awards of cash and Stock, the Plan shall be unfunded.  Although bookkeeping accounts may be established with respect to Holders who are entitled to cash, Stock, other property or rights thereto under the Plan, any such accounts shall be used merely as a bookkeeping convenience.  The Corporation shall not be required to segregate any assets that may at any time be represented by cash, Stock, other property or rights thereto, nor shall the Plan be construed as providing for such segregation, nor shall the Corporation nor the Board of Directors nor the Committee be deemed to be a trustee of any cash, Stock, other property or rights thereto to be granted under the Plan.  Any liability of the Corporation to any Holder with respect to a grant of cash, Stock, other property or rights thereto under the Plan shall be based solely upon any contractual obligations that may be created by the Plan and any Award Agreement; no such obligation of the Corporation shall be deemed to be secured by any pledge or other encumbrance on any property of the Corporation. Neither the Corporation nor the Board of Directors nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by the Plan.


10.8

No Guarantee of Interests.  The Board of Directors, the Committee and the Corporation do not guarantee the Stock of the Corporation from loss or depreciation.


10.9

Payment of Expenses.  All expenses incident to the administration, termination or protection of the Plan, including, but not limited to, legal and accounting fees, shall be paid by the Corporation or its Subsidiaries;provided,however, the Corporation or a Subsidiary may recover any and all damages, fees, expenses and costs arising out of any actions taken by the Corporation to enforce its right to purchase Stock under this Plan.




10.10

Corporation Records.  Records of the Corporation or its Subsidiaries regarding the Holder’s period of employment, termination of employment and the reason therefor, leaves of absence, re-employment, and other matters shall be conclusive for all purposes hereunder, unless determined by the Committee to be incorrect.


10.11

Information.  The Corporation and its Subsidiaries shall, upon request orbusiness as may be specifically required hereunder, furnish or cause to be furnished, allproperly come before the Special Meeting of the information or documentation which is necessary or required by the Committee to perform its duties and functions under the Plan.


10.12

Corporation Action.  Any action required of the Corporation shall be by resolution of its Board of Directors or by a person authorized to act by resolution of the Board of Directors.


10.13

Severability.  If any provision of this Plan is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and the Plan shall be construed and enforced as if the illegal or invalid provision had never been included herein.  If any of the terms or provisions of this Plan conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible Individuals who are subject to Section 16(b) of the Exchange Act) or Section 422 of the Code (with respect to Incentive Options), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 or Section 422 of the Code unless the Committee has determined that the Plan should not comply with such requirements.  With respect to Incentive Options, if this Plan does not contain any provision required to be included herein under Section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, further, that, to the extent any Option that is intended to qualify as an Incentive Option cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory Option for all purposes of the Plan.


10.14

Notices.  Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered or sent by mail. Any such notice required or permitted to be delivered hereunder shall be deemed to be delivered on the date on which it is personally delivered, or, whether actually received or not, on the third Business Day after it is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has theretofore specified by written notice delivered in accordance herewith. The Corporation or a Holder may change, at any time and from time to time, by written notice to the other, the address which it or he had previously specified for receiving notices.  Until changed in accordance herewith, the Corporation and each Holder shall specify as its and his address for receiving notices the address set forth in the Award Agreement pertaining to the shares to which such notice relates.


10.15

Waiver of Notice.  Any person entitled to notice hereunder may waive such notice.


10.16

Successors.  The Plan shall be binding upon the Holder, his legal representatives, heirs, legatees and distributees, upon the Corporation, its successors and assigns, and upon the Committee and its successors.


10.17

Headings.  The titles and headings of Sections and Paragraphs are included for convenience of reference only and are not to be considered in construction of the provisions hereof.


10.18

Governing Law.  All questions arising with respect to the provisions of the Plan shall be determined by application of the laws of the State of Nevada except to the extent Nevada law is preempted by federal law.  Questions arising with respect to the provisions of an Award Agreement that are matters of contract law shall be governed by the laws of the state specified in the Award Agreement, except to the extent Nevada corporate law conflicts with the contract law of such state, in which event Nevada corporate law shall govern.  The obligation of the Corporation to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.


10.19

Word Usage.  Words used in the masculine shall apply to the feminine where applicable, and wherever the context of this Plan dictates, the plural shall be read as the singular and the singular as the plural.





18


Stockholders.

APPENDIX C


Amendment to Ring Energy, Inc. Long Term Incentive Plan


Section 2.1 of the Ring Energy, Inc. Long Term Incentive Plan is amended to read in full as follows:


2.1

Maximum Number of Shares.  Subject to the provisions of Section 7 of this Plan, the maximum aggregate number of shares of Stock in respect of which Awards may be granted for all purposes under the Plan shall be5,000,000; and provided, further, that if any shares of Stock subject to an Award are forfeited or if any Award based on shares of Stock is otherwise terminated without issuance of such shares of Stock or other consideration in lieu of such shares of Stock, the shares of Stock subject to such Award shall to the extent of such forfeiture or termination, again be available for Awards under the Plan if no participant shall have received any benefits of ownership in respect thereof.








WRITTEN CONSENT OF SHAREHOLDER OF

RING ENERGY, INC.,

a Nevada corporation


The undersigned shareholder of Ring Energy, Inc. (the “Company”) hereby acknowledges receipt of the Notice of Solicitation of Consents and accompanying Consent Solicitation Statement, each dated January __, 2013.  The undersigned hereby consents (by checking the FOR box) or declines to consent (by checking the AGAINST box or the ABSTAIN box) to the adoption of the following recitals and resolutions:


. FOR                    . AGAINST                    . ABSTAIN


WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to amend the Company’s Articles of Incorporation, in the form of the Certificate of Amendment (the “Articles Amendment”) attached asAppendix A to the Consent Solicitation Statement that accompanies this Consent, and has referred the same to the shareholders of the Company for approval by written consent;


WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders for the shareholders to adopt the Ring Energy, Inc. Long Term Incentive Plan (the “Plan Approval”) attached asAppendix B to the Consent Solicitation Statement that accompanies this Consent, and has referred the same to the shareholders of the Company for approval by written consent;


WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to amend the Ring Energy, Inc. Long Term Incentive Plan, in the form of the Amendment to the Ring Energy, Inc. Long Term Incentive Plan (the “Plan Amendment”) attached asAppendix C to the Consent Solicitation Statement that accompanies this Consent, and has referred the same to the shareholders of the Company for approval by written consent; and


WHEREAS, the Board of Directors of the Company has recommended that the shareholders vote “FOR” the below resolutions, which it has deemed is in the best interests of the Company and its shareholders;


NOW, THEREFORE, IT IS RESOLVED, that the shareholders of the Company hereby approve the Articles Amendment, in the form attached asAppendix A to the Consent Solicitation Statement that accompanies this Consent;


FURTHER RESOLVED, that the shareholders of the Company hereby approve the Ring Energy, Inc. Long Term Incentive Plan, in the form attached asAppendix B to the Consent Solicitation Statement that accompanies this Consent;


FURTHER RESOLVED, that the shareholders of the Company hereby approve the Amendment to the Ring Energy, Inc. Long Term Incentive Plan, in the form attached asAppendix C to the Consent Solicitation Statement that accompanies this Consent; and


This Written Consent action may be executed in counterparts.  Failure of any particular shareholder(s) to execute and deliver counterparts is immaterial so long as the holders of a majority of the voting power of the outstanding shares of the Company do execute and deliver counterparts.


This Consent is solicited by the Company’s Board of Directors.


IN WITNESS WHEREOF, the undersigned has executed this Consent on January __, 2013.


Print name(s) exactly as shown on Stock Certificate(s)



Signature (and Title, if any)



Signature (if held jointly)


Sign exactly as name(s) appear(s) on stock certificate(s).  If stock is held jointly, each holder must sign.  If signing is by attorney, executor, administrator, trustee or guardian, give full title as such.  A corporation or partnership must sign by an authorized officer or general partner, respectively.






PLEASE SIGN, DATE AND RETURN THIS CONSENT TO RONALD N. VANCE & ASSOCIATES, LEGAL COUNSEL FOR RING ENERGY, INC., AT 1656 REUNION AVENUE, SUITE 250, SOUTH JORDAN, UTAH 84095.


You may submit your consent by email to jamie@vancelaw.us.


You may also submit your consent by facsimile to (801) 466-8803.


Important Notice Regarding the Availability of Consent Materials.  The Consent Solicitation Statement is available on the SEC’s website at www.sec.gov.