Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 09, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 001-36057 | |
Entity Registrant Name | RING ENERGY, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 90-0406406 | |
Entity Address, Address Line One | 1725 Hughes Landing, Suite 900 | |
Entity Address, City or Town | The Woodlands, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77380 | |
City Area Code | (281) | |
Local Phone Number | 397-3699 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | REI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001384195 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 174,411,333 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 890,567 | $ 2,408,316 |
Accounts receivable | 45,864,400 | 24,026,807 |
Joint interest billing receivable | 1,897,125 | 2,433,811 |
Derivative assets | 13,322,013 | |
Prepaid expenses and other assets | 3,246,569 | 938,029 |
Total Current Assets | 65,220,674 | 29,806,963 |
Properties and Equipment | ||
Oil and natural gas properties, full cost method | 1,418,931,111 | 883,844,745 |
Financing lease asset subject to depreciation | 2,067,375 | 1,422,487 |
Fixed assets subject to depreciation | 2,985,778 | 2,089,722 |
Total Properties and Equipment | 1,423,984,264 | 887,356,954 |
Accumulated depreciation, depletion and amortization | (269,541,416) | (235,997,307) |
Net Properties and Equipment | 1,154,442,848 | 651,359,647 |
Operating lease asset | 1,071,482 | 1,277,253 |
Derivative assets | 11,545,982 | |
Deferred financing costs | 19,029,907 | 1,713,466 |
Total Assets | 1,251,310,893 | 684,157,329 |
Current Liabilities | ||
Accounts payable | 86,822,997 | 46,233,452 |
Income tax liability | 36,736 | |
Financing lease liability | 406,890 | 316,514 |
Operating lease liability | 306,715 | 290,766 |
Derivative liabilities | 23,767,689 | 29,241,588 |
Notes payable | 877,631 | 586,410 |
Deferred cash payment | 14,511,687 | |
Total Current Liabilities | 126,730,345 | 76,668,730 |
Noncurrent Liabilities | ||
Deferred income taxes | 5,920,300 | 90,292 |
Revolving line of credit | 435,000,000 | 290,000,000 |
Financing lease liability, less current portion | 564,205 | 343,727 |
Operating lease liability, less current portion | 905,524 | 1,138,319 |
Derivative liabilities | 8,734,388 | |
Asset retirement obligations | 29,426,737 | 15,292,054 |
Total Liabilities | 607,281,499 | 383,533,122 |
Mezzanine Equity | ||
Convertible preferred stock - $0.001 par value; 153,176 shares outstanding | 137,858,446 | |
Stockholders' Equity | ||
Preferred stock - $0.001 par value; 50,000,000 shares authorized; 153,176 shares issued or outstanding | ||
Common stock - $0.001 par value; 225,000,000 shares authorized; 131,586,927 shares and 100,192,562 shares issued and outstanding, respectively | 131,587 | 100,193 |
Additional paid-in capital | 634,845,283 | 553,472,292 |
Accumulated deficit | (128,805,922) | (252,948,278) |
Total Stockholders' Equity | 506,170,948 | 300,624,207 |
Total Liabilities, Mezannine Equity and Stockholders' Equity | $ 1,251,310,893 | $ 684,157,329 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
CONDENSED BALANCE SHEETS | ||
Convertible preferred stock, par value | $ 0.001 | |
Convertible preferred stock, shares outstanding | 153,176 | |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 153,176 | 153,176 |
Preferred stock, shares outstanding | 153,176 | 153,176 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 225,000,000 | 225,000,000 |
Common stock, shares, issued | 131,586,927 | 100,192,562 |
Common stock, shares, outstanding | 131,586,927 | 100,192,562 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED STATEMENTS OF OPERATIONS | ||||
Oil Natural Gas and Natural Gas Liquids Revenues | $ 94,408,948 | $ 49,376,176 | $ 247,551,855 | $ 136,638,810 |
Costs and Operating Expenses | ||||
Lease operating expenses | 13,029,098 | 6,983,196 | 30,283,706 | 22,634,259 |
Gathering, transportation and processing costs | 1,051,163 | 1,846,247 | 2,883,348 | |
Ad valorem taxes | 1,199,385 | 703,774 | 3,100,578 | 2,144,800 |
Oil and natural gas production taxes | 4,563,519 | 2,240,759 | 11,939,338 | 6,291,860 |
Depreciation, depletion and amortization | 14,324,502 | 9,310,524 | 34,854,993 | 26,693,808 |
Asset retirement obligation accretion | 243,140 | 182,905 | 617,685 | 560,662 |
Operating lease expense | 83,590 | 83,589 | 250,770 | 439,896 |
General and administrative expense | 7,393,848 | 4,433,251 | 18,748,427 | 11,103,394 |
Total Costs and Operating Expenses | 40,837,082 | 24,989,161 | 101,641,744 | 72,752,027 |
Income from Operations | 53,571,866 | 24,387,015 | 145,910,111 | 63,886,783 |
Other Income (Expense) | ||||
Interest income | 4 | 4 | 1 | |
Interest (expense) | (7,021,385) | (3,551,462) | (13,699,045) | (10,947,960) |
Gain (loss) on derivative contracts | 32,851,189 | (6,720,320) | (2,201,970) | (73,586,199) |
Net Other Income (Expense) | 25,829,808 | (10,271,782) | (15,901,011) | (84,534,158) |
Income (Loss) Before Provision for Income Taxes | 79,401,674 | 14,115,233 | 130,009,100 | (20,647,375) |
Benefit from (Provision for) Income Taxes | (4,315,783) | 48,701 | (5,866,744) | (141,943) |
Net Income (Loss) | $ 75,085,891 | $ 14,163,934 | $ 124,142,356 | $ (20,789,318) |
Basic Earnings (Loss) per share | $ 0.65 | $ 0.14 | $ 1.16 | $ (0.21) |
Diluted Earnings (Loss) per share | $ 0.49 | $ 0.12 | $ 0.92 | $ (0.21) |
CONDENSED STATEMENTS OF STOCKHO
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance at Dec. 31, 2020 | $ 85,568 | $ 550,951,415 | $ (256,271,170) | $ 294,765,813 |
Balance (in shares) at Dec. 31, 2020 | 85,568,287 | |||
Common stock and warrants issued for cash, net | (65,000) | (65,000) | ||
Exercise of pre-funded warrants issued in offering | $ 13,429 | 13,429 | ||
Exercise of pre-funded warrants issued in offering (in shares) | 13,428,500 | |||
Exercise of common warrants issued in offering | $ 185 | 147,655 | 147,840 | |
Exercise of common warrants issued in offering (in shares) | 184,800 | |||
Restricted stock vested | $ 94 | (94) | ||
Restricted stock vested (in shares) | 94,350 | |||
Share-based compensation | 355,494 | 355,494 | ||
Net income (loss) | (19,066,093) | (19,066,093) | ||
Balance at Mar. 31, 2021 | $ 99,276 | 551,389,470 | (275,337,263) | 276,151,483 |
Balance (in shares) at Mar. 31, 2021 | 99,275,937 | |||
Balance at Dec. 31, 2020 | $ 85,568 | 550,951,415 | (256,271,170) | 294,765,813 |
Balance (in shares) at Dec. 31, 2020 | 85,568,287 | |||
Net income (loss) | (20,789,318) | |||
Balance at Sep. 30, 2021 | $ 99,360 | 552,598,622 | (277,060,488) | 275,637,494 |
Balance (in shares) at Sep. 30, 2021 | 99,359,938 | |||
Balance at Mar. 31, 2021 | $ 99,276 | 551,389,470 | (275,337,263) | 276,151,483 |
Balance (in shares) at Mar. 31, 2021 | 99,275,937 | |||
Exercise of common warrants issued in offering | $ 100 | 79,900 | 80,000 | |
Exercise of common warrants issued in offering (in shares) | 100,000 | |||
Restricted stock vested | $ 3 | (3) | ||
Restricted stock vested (in shares) | 3,480 | |||
Shares to cover tax withholdings for restricted stock vested | $ (28) | 28 | ||
Shares to cover tax withholdings for restricted stock vested (in shares) | (28,272) | |||
Share-based compensation | 351,775 | 351,775 | ||
Net income (loss) | (15,887,159) | (15,887,159) | ||
Balance at Jun. 30, 2021 | $ 99,351 | 551,821,170 | (291,224,422) | 260,696,099 |
Balance (in shares) at Jun. 30, 2021 | 99,351,145 | |||
Restricted stock vested | $ 13 | (13) | ||
Restricted stock vested (in shares) | 12,500 | |||
Shares to cover tax withholdings for restricted stock vested | $ (4) | 4 | ||
Shares to cover tax withholdings for restricted stock vested (in shares) | (3,707) | |||
Share-based compensation | 777,461 | 777,461 | ||
Net income (loss) | 14,163,934 | 14,163,934 | ||
Balance at Sep. 30, 2021 | $ 99,360 | 552,598,622 | (277,060,488) | 275,637,494 |
Balance (in shares) at Sep. 30, 2021 | 99,359,938 | |||
Balance at Dec. 31, 2021 | $ 100,193 | 553,472,292 | (252,948,278) | 300,624,207 |
Balance (in shares) at Dec. 31, 2021 | 100,192,562 | |||
Share-based compensation | 1,521,910 | 1,521,910 | ||
Net income (loss) | 7,112,043 | 7,112,043 | ||
Balance at Mar. 31, 2022 | $ 100,193 | 554,994,202 | (245,836,235) | 309,258,160 |
Balance (in shares) at Mar. 31, 2022 | 100,192,562 | |||
Balance at Dec. 31, 2021 | $ 100,193 | 553,472,292 | (252,948,278) | 300,624,207 |
Balance (in shares) at Dec. 31, 2021 | 100,192,562 | |||
Net income (loss) | 124,142,356 | |||
Balance at Sep. 30, 2022 | $ 131,587 | 634,845,283 | (128,805,922) | 506,170,948 |
Balance (in shares) at Sep. 30, 2022 | 131,586,927 | |||
Balance at Mar. 31, 2022 | $ 100,193 | 554,994,202 | (245,836,235) | 309,258,160 |
Balance (in shares) at Mar. 31, 2022 | 100,192,562 | |||
Exercise of common warrants issued in offering | $ 6,454 | 5,156,672 | 5,163,126 | |
Exercise of common warrants issued in offering (in shares) | 6,453,907 | |||
Options exercised | $ 100 | (100) | ||
Options exercised (in shares) | 100,000 | |||
Shares elected to be withheld for options exercised | $ (48) | 48 | ||
Shares elected to be withheld for options exercised (in shares) | (47,506) | |||
Restricted stock vested | $ 610 | (610) | ||
Restricted stock vested (in shares) | 610,195 | |||
Shares to cover tax withholdings for restricted stock vested | $ (73) | 73 | ||
Shares to cover tax withholdings for restricted stock vested (in shares) | (73,047) | |||
Payments to cover tax withholdings for restricted stock vested | (257,694) | (257,694) | ||
Share-based compensation | 1,899,245 | 1,899,245 | ||
Net income (loss) | 41,944,422 | 41,944,422 | ||
Balance at Jun. 30, 2022 | $ 107,236 | 561,791,836 | (203,891,813) | 358,007,259 |
Balance (in shares) at Jun. 30, 2022 | 107,236,111 | |||
Exercise of common warrants issued in offering | $ 3,000 | 2,397,000 | 2,400,000 | |
Exercise of common warrants issued in offering (in shares) | 3,000,000 | |||
Restricted stock vested | $ 14 | (14) | ||
Restricted stock vested (in shares) | 13,504 | |||
Shares to cover tax withholdings for restricted stock vested | $ (3) | 3 | ||
Shares to cover tax withholdings for restricted stock vested (in shares) | (2,674) | |||
Payments to cover tax withholdings for restricted stock vested | (6,790) | (6,790) | ||
Common stock issuance for Stronghold | $ 21,340 | 69,120,215 | 69,141,555 | |
Common stock issuance for Stronghold (in shares) | 21,339,986 | |||
Share-based compensation | 1,543,033 | 1,543,033 | ||
Net income (loss) | 75,085,891 | 75,085,891 | ||
Balance at Sep. 30, 2022 | $ 131,587 | $ 634,845,283 | $ (128,805,922) | $ 506,170,948 |
Balance (in shares) at Sep. 30, 2022 | 131,586,927 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ 124,142,356 | $ (20,789,318) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, depletion and amortization | 34,854,993 | 26,693,808 |
Asset retirement obligation accretion | 617,685 | 560,662 |
Amortization of deferred financing costs | 1,483,621 | 496,533 |
Share-based compensation | 4,964,188 | 1,484,730 |
Deferred income tax expense (benefit) | 5,830,008 | 141,943 |
Loss on derivative contracts | 2,201,970 | 73,586,199 |
Cash (paid) for derivative settlements, net | (48,593,882) | (33,278,132) |
Changes in assets and liabilities: | ||
Accounts receivable | (21,300,907) | (5,017,078) |
Prepaid expenses and other assets | (2,308,540) | (902,692) |
Accounts payable | 33,992,075 | 8,329,563 |
Settlement of asset retirement obligation | (2,548,344) | (1,782,779) |
Net Cash Provided by (Used In) Operating Activities | 133,335,223 | 49,523,439 |
Cash Flows From Investing Activities | ||
Payments for the Stronghold Acquisition | (183,359,626) | |
Payments to purchase oil and natural gas properties | (1,211,691) | (579,156) |
Payments to develop oil and natural gas properties | (83,776,050) | (34,680,935) |
Purchase of fixed assets subject to depreciation | (158,598) | (609,633) |
Sale of fixed assets subject to depreciation | 134,600 | |
Proceeds from divestiture of oil and natural gas properties | 25,066 | 2,000,000 |
Net Cash Provided by (Used in) Investing Activities | (268,346,299) | (33,869,724) |
Cash Flows From Financing Activities | ||
Proceeds from revolving line of credit | 592,000,000 | 34,400,000 |
Payments on revolving line of credit | (447,000,000) | (52,400,000) |
Proceeds from issuance of common stock and warrants | 7,563,126 | 241,269 |
Payments to cover tax withholdings for restricted stock vested | (264,484) | |
Proceeds from notes payable | 1,245,303 | 1,233,138 |
Payments on notes payable | (954,082) | (375,987) |
Payment of deferred financing costs | (18,762,502) | (76,887) |
Reduction of financing lease liabilities | (334,034) | (206,936) |
Net Cash Provided by (Used in) Financing Activities | 133,493,327 | (17,185,403) |
Net Change in Cash | (1,517,749) | (1,531,688) |
Cash at Beginning of Period | 2,408,316 | 3,578,634 |
Cash at End of Period | 890,567 | 2,046,946 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 12,371,753 | 10,622,077 |
Noncash Investing and Financing Activities | ||
Asset retirement obligation incurred during development | 218,082 | 160,285 |
Asset retirement obligation acquired | 14,538,550 | 662,704 |
Asset retirement obligation revisions | 153,475 | |
Asset retirement obligation sold | (2,934,126) | |
Capitalized expenditures attributable to drilling projects financed through current liabilities | 13,233,975 | 5,921,816 |
Operating lease assets obtained in exchange for new operating lease liability | 839,536 | |
Operating lease asset revision | $ (621,636) | |
Investing Activities - Cash Paid | ||
Cash paid by bank to Stronghold on closing | 121,392,455 | |
Deposit in escrow | 46,500,000 | |
Direct transaction costs | 9,162,143 | |
Cash paid for realized August oil derivative losses | 1,777,925 | |
Cash paid for inventory and fixed assets acquired | 4,527,103 | |
Payments for the Stronghold Acquisition | 183,359,626 | |
Investing Activities - Noncash | ||
Assumption of suspense liability | 1,651,596 | |
Assumption of derivative liabilities | 24,784,406 | |
Assumption of asset retirement obligation | 14,538,550 | |
Deferred cash payment at fair value | 14,511,688 | |
Financing Activities - Noncash | ||
Common stock issued for acquisition | 69,141,555 | |
Convertible preferred stock issued for acquisition | $ 137,858,446 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Condensed Financial Statements These unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. Organization and Nature of Operations – COVID-19 – Liquidity and Capital Considerations While changes in oil and natural gas prices affect the Company’s liquidity, the Company has put in place hedges to protect, to some extent, its cash flows from such price declines; however, if oil or natural gas prices rapidly deteriorate due to unanticipated economic conditions, this could have a material adverse effect on the Company’s cash flows in spite of our hedging activities. The Company expects ongoing oil price volatility over the short term. Extended depressed oil prices have historically had and could have a material adverse impact on the Company’s oil revenue, which may be mitigated to some extent by the Company’s hedge contracts. The Company is mindful of oil price volatility and its impact on the Company’s liquidity. The Company believes that it has the ability to continue to fund its operations and service its debt by using cash on hand and cash flows from operations. Use of Estimates Fair Value Measurements Fair Values of Financial Instruments Derivative Instruments and Commodity Risk Activities Any gains or losses resulting from changes in fair value of outstanding derivative financial instruments and from the settlement of derivative financial instruments are recognized in earnings and included as a component of Other income (expense) in the Statements of Operations. When applicable, the Company records all derivative instruments, other than those that meet the normal purchases and sales exception, on the Balance Sheets as either an asset or liability measured at fair value. Changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. The change in fair value resulted in the recognition of an unrealized gain of $47,712,305 for the three months ended September 30, 2022 and an unrealized gain of $46,391,912 for the nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the change in fair value resulted in the recognition of an unrealized gain of $8,200,688 and an unrealized loss of $40,308,067, respectively, on derivative contracts. During the three and nine months ended September 30, 2022, the Company had realized losses of $14,861,116 and $48,593,882, respectively, on derivatives. During the three and nine months ended September 30, 2021, the Company had realized losses of $14,921,008 and $33,278,132, respectively, on derivatives net of a realized gain of $581,424 in March 2021 from unwinding the Company’s then held gas swaps. Concentration of Credit Risk and Major Customers At September 30, 2022, approximately 94% of the Company’s accounts receivables and joint interest billing receivables are from purchasers of oil and gas. Oil and gas sales are generally unsecured. The Company also has joint interest billing receivables which are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. Accounts receivable from joint interest owners or purchasers outstanding longer than the contractual payment terms are considered past due.The Company has not had any significant credit losses in the past and believes its accounts and joint interest billing receivables are collectable. Accordingly, no material allowance for credit losses has been provided at September 30, 2022. Oil and Gas Properties All capitalized costs of oil and gas properties, plus estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves as determined by the Company’s independent petroleum engineers. The Company evaluates oil and gas properties for impairment quarterly. The Company did not incur a write down of oil and natural gas properties as a result of the ceiling test for the three and nine months ended September 30, 2022 or for the three and nine months ended September 30, 2021. Depreciation, depletion and amortization expense for the three and nine months ended September 30, 2022 was $14,324,502 and $34,854,993, respectively, based on depletion at the rate of $11.59 and $11.95, respectively, per barrel of oil equivalent compared to $9,310,524 and $26,693,808, respectively, based on depletion at the rate of $12.12 and $11.64 per barrel of oil equivalent for the three and nine months ended September 30, 2021. These amounts include $160,928 and $437,015, respectively, of depreciation and amortization for the three and nine months ended September 30, 2022, compared to $120,817 and $276,677, respectively, of depreciation and amortization for the three and nine months ended September 30, 2021. Equipment, Vehicles and Leasehold Improvements Asset Retirement Obligation Share-Based Employee Compensation Share-Based Compensation to Non-Employees Income Taxes Since December 31, 2020, the Company has determined that a full valuation allowance is necessary due to the Company assessment that it is more likely than not that it will be unable to obtain the benefits of its deferred tax assets due to the Company’s history of taxable losses. During the nine months ended September 30, 2022, the Company determined that certain existing deferred tax assets will not be offset by existing deferred tax liabilities as a result of the 80% limitation on the utilization net operating losses incurred after 2017. Accordingly, for the three and nine months ended September 30, 2022, the Company recorded federal income tax expense of $3,611,381 and $4,625,429, respectively. The Company recorded state deferred income tax expense of $667,666 and $1,204,579, respectively, during the three and nine months ended September 30, 2022. The Company recorded a state current income tax expense of $36,736 during the three and nine months ended September 30, 2022. The Company recorded a state deferred income tax benefit of $48,701 and expense of $141,943, respectively, for the three and nine months ended September 30, 2021. The Company has immaterial operations in New Mexico which is in a net deferred tax asset position for which a full valuation allowance is still recorded. The shares issued for the Stronghold Acquisition (further discussed in Note 5) resulted in the Company having an ownership change under Section 382 of the Internal Revenue Code. Section 382 limits the availability of certain tax attributes, including net operating losses and disallowed interest carryforwards, to offset future taxable income of the Company. In evaluating its need for a valuation allowance against its deferred tax assets, the Company has estimated the amount of tax attributes related to the pre-ownership change period to be available under Section 382 in periods in which it expects deferred tax liabilities to be realized based on currently available information. Based on its current analysis, the Company does not anticipate any material tax attributes to expire unused as result of the section 382 ownership change; however, the ultimate timing in the amount of tax attributes available in future periods may be different than our current estimate and will be determined in each year as new information becomes available. Changes in expectation in the timing of the availability of our tax attributes could result in adjustments to the valuation allowance in future years as we update our analysis based on new information. For the nine months ended September 30, 2022, the Company’s overall effective tax rate of 4.5% was primarily impacted by the valuation allowance on its federal net deferred tax asset and state income taxes. Three-Stream Reporting Recently Adopted Accounting Pronouncements Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes In October 2020, the FASB issued ASU No. 2020-10, “ Codification Improvements In August 2020, the FASB issued ASU No. 2020-06, “ Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” Recent Accounting Pronouncements Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” Reference Rate Reform (Topic 848): Scope In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” Basic and Diluted Earnings per Share |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 2 – REVENUE RECOGNITION The Company predominantly derives its revenue from the sale of produced crude oil and natural gas. The contractual performance obligation is satisfied when the product is delivered to the customer. Revenue is recorded in the month the product is delivered to the purchaser. The Company receives payment from one to three months after delivery. The Company has utilized the practical expedient in ASC (“Accounting Standards Codification”) 606-10-50-14, which states an entity is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s sales contracts, each unit of production delivered to a customer represents a separate performance obligation, therefore, future volumes to be delivered are wholly unsatisfied and disclosure of transaction price allocated to remaining performance obligation is not required. The transaction price includes variable consideration as product pricing is based on published market prices and reduced for contract specified differentials such as quality, energy content and transportation. The guidance does not require that the transaction price be fixed or stated in the contract. Estimating the variable consideration does not require significant judgment and the Company engages third party sources to validate the estimates. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange for those products. Oil sales Under the Company’s oil sales contracts, the Company sells oil production at the point of delivery and collects an agreed upon index price, net of pricing differentials. The Company recognizes revenue at the net price received when control transfers to the purchaser at the point of delivery and it is probable the Company will collect the consideration it is entitled to receive. Natural gas and NGL sales Under the Company’s natural gas sales processing contracts for its Central Basin Platform properties, Delaware Basin properties and part of its Northwest Shelf assets, the Company delivers unprocessed natural gas to a midstream processing entity at the wellhead. The midstream processing entity obtains control of the natural gas and NGLs (natural gas liquids) at the wellhead. The midstream processing entity gathers and processes the natural gas and NGLs and remits proceeds to the Company for the resulting sale of natural gas and NGLs. Under these processing agreements, the Company recognizes revenue when control transfers to the purchaser at the point of delivery and it is probable the Company will collect the consideration it is entitled to receive. As such, the Company accounts for any fees and deductions as a reduction of the transaction price. Until April 30, 2022, under the Company’s natural gas sales processing contracts for the bulk of its Northwest Shelf assets, the Company delivered unprocessed natural gas to a midstream processing entity at the well head. However, the Company maintained ownership of the gas through processing and received proceeds from the marketing of the resulting products. Under this processing agreement, the Company recognized the fees associated with the processing as an expense rather than netting these costs against Oil and Natural Gas Revenues in the Statements of Operations. Beginning May 1, 2022, these contracts were combined into one contract, and it was modified so that the Company no longer maintained ownership of the gas through processing. Accordingly, the Company from that point on accounts for any such fees and deductions as a reduction of the transaction price. Disaggregation of revenue. For The Three Months For The Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Operating Revenues Oil $ 86,413,665 $ 45,889,548 $ 229,532,827 $ 126,927,318 Natural gas 4,655,002 $ 3,486,628 14,678,747 9,711,492 Natural gas liquids 3,340,281 — 3,340,281 — Total operating revenues $ 94,408,948 $ 49,376,176 $ 247,551,855 $ 136,638,810 All revenues are from production from the Permian Basin in Texas and New Mexico. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
LEASES | NOTE 3 – LEASES The Company has operating leases for its offices in The Woodlands, Texas and Midland, Texas. Beginning January 15, 2021, the Company entered into a five-and-a-half-year sub-lease for office space in The Woodlands, Texas. Until September 2022, the Midland office was under a five-year lease which began January 1, 2021. The future payments associated with these operating leases are reflected below. The Company also has month to month leases for office equipment and compressors used in its operations on which the Company has elected to apply ASU 2016-02 (i.e., not capitalize). The office equipment and compressors are not subject to ASU 2016-02 based on the agreement and nature of use. These leases are for terms that are less than 12 months and the Company does not intend to continue to lease this equipment for more than 12 months. The lease costs associated with these leases is reflected in the short-term lease costs within Lease operating expenses, shown below. The Company has financing leases for vehicles. These leases have a term of 36 months at the end of which the Company owns the vehicles. These vehicles are generally sold at the end of their term and the proceeds applied to new vehicles. Future lease payments (undiscounted future cash flows) associated with these operating and financing leases as of September 30, 2022 are as follows: 2022 2023 2024 2025 2026 Operating lease payments (1) $ 87,282 $ 356,991 $ 376,855 $ 384,719 $ 110,096 Financing lease payments (2) 109,582 438,328 372,056 99,796 — (1) The weighted average discount rate as of September 30, 2022 for operating leases was 4.50% . Based on this rate, the future lease payments above include imputed interest of $103,704 . The weighted average remaining term of operating leases was 3.55 years. (2) The weighted average discount rate as of September 30, 2022 for financing leases was 4.00% . Based on this rate, the future lease payments above include imputed interest of $48,667 . The weighted average remaining term of financing leases was 2.38 years. The following table represents a reconciliation between the undiscounted future cash flows in the table above and the operating and financing lease liabilities disclosed in the Balance Sheets: As of September 30, 2022 December 31, 2021 Operating lease liability, current portion $ 306,715 $ 290,766 Operating lease liability, non-current portion 905,524 1,138,319 Operating lease liability, total $ 1,212,239 $ 1,429,085 Total undiscounted future cash flows 1,315,943 1,577,786 Imputed interest 103,704 148,701 Undiscounted future cash flows less imputed interest $ 1,212,239 $ 1,429,085 Financing lease liability, current portion $ 406,890 $ 316,514 Financing lease liability, non-current portion 564,205 343,727 Financing lease liability, total $ 971,095 $ 660,241 Total undiscounted future cash flows 1,019,762 692,091 Imputed interest 48,667 31,850 Undiscounted future cash flows less imputed interest $ 971,095 $ 660,241 The following table provides supplemental information regarding cash flows from operations for the three and nine months ended: Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Operating lease costs $ 83,590 $ 83,589 $ 250,770 $ 439,896 Short term lease costs (1) 639,708 964,873 1,937,310 2,903,387 Financing lease costs: Amortization of financing lease assets (2) 106,982 85,367 334,447 189,831 Interest on lease liabilities (3) 10,391 5,160 24,184 14,166 (1) Amount included in Lease operating expenses (2) Amount included in Depreciation, depletion and amortization (3) Amount included in Interest expense |
EARNINGS (LOSS) PER SHARE INFOR
EARNINGS (LOSS) PER SHARE INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS (LOSS) PER SHARE INFORMATION | |
EARNINGS (LOSS) PER SHARE INFORMATION | NOTE 4 – EARNINGS (LOSS) PER SHARE INFORMATION For the Three Months For the Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Net Income (Loss) $ 75,085,891 $ 14,163,934 $ 124,142,356 $ (20,789,318) Basic Weighted-Average Shares Outstanding 115,376,280 99,358,504 107,349,184 99,251,532 Effect of dilutive securities: Stock options 52,110 135,536 93,688 — Restricted stock units 1,908,662 1,463,690 2,135,675 — Performance stock units 196,520 — 235,440 — Common warrants 19,884,296 20,263,018 20,180,729 — Convertible preferred stock 14,337,127 — 4,831,559 — Diluted Weighted-Average Shares Outstanding 151,754,995 121,220,748 134,826,275 99,251,532 Basic Earnings (Loss) per Share $ 0.65 $ 0.14 $ 1.16 $ (0.21) Diluted Earnings (Loss) per Share $ 0.49 $ 0.12 $ 0.92 $ (0.21) For the three months ended September 30, 2022, stock options to purchase 70,500 shares of common stock, 37,487 shares of unvested restricted stock units, and 860,212 shares of unvested performance stock units were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. For the nine months ended September 30, 2022, stock options to purchase 70,500 shares of common stock, 11,312 shares of unvested restricted stock units, and 798,768 shares of unvested performance stock units were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. For the three months ended September 30, 2021, stock options to purchase 70,500 shares of common stock and 14,709 shares of unvested restricted stock were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. For the nine months ended September 30, 2021, 465,500 shares of common stock, 3,247,623 shares of unvested restricted stock, and unexercised common warrants of 29,519,500 were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. |
ACQUISITIONS & DIVESTITURES
ACQUISITIONS & DIVESTITURES | 9 Months Ended |
Sep. 30, 2022 | |
ACQUISITIONS & DIVESTITURES | |
ACQUISITIONS & DIVESTITURES | NOTE 5 – ACQUISITIONS & DIVESTITURES Stronghold Acquisition On July 1, 2022, Ring, 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, collectively, “Stronghold”), as seller, entered into a purchase and sale agreement (the “Purchase Agreement”). Pursuant to the Purchase Agreement, Ring acquired (the “Stronghold Acquisition”) interests in oil and gas leases and related property of Stronghold consisting of approximately 37,000 net acres located in the Central Basin Platform of the Texas Permian Basin. On August 31, 2022, Ring completed the Stronghold Acquisition pursuant to the Purchase Agreement. The fair value of consideration paid to Stronghold was approximately $395.7 million, of which $167.9 $15.0 Purchase Price Allocation The Stronghold Acquisition has been accounted for as an asset acquisition in accordance with ASC 805. The fair value of the consideration paid by Ring and allocation of that amount to the underlying assets acquired, on a relative fair value basis, was recorded on Ring’s books as of the date of the closing of the Stronghold Acquisition. Additionally, costs directly related to the Stronghold Acquisition were capitalized as a component of the purchase price. Determining the fair value of the assets and liabilities acquired requires judgment and certain assumptions to be made, the most significant of these being related to the valuation of Stronghold’s oil and gas properties. The inputs and assumptions related to the oil and gas properties are categorized as level 3 in the fair value hierarchy. The following table represents the preliminary allocation of the total cost of the Stronghold Acquisition to the assets acquired and liabilities assumed as of the Stronghold Acquisition date: Consideration: Shares of Ring Common Stock issued 21,339,986 Ring Common Stock price as of August 31, 2022 $ 3.24 Common Stock Consideration $ 69,141,555 Shares of Ring Preferred Stock issued 153,176 Aggregate Liquidation Preference $ 153,176,000 Conversion Price $ 3.60 As-Converted Shares of Ring Common Stock 42,548,903 Ring Common Stock Price as of August 31, 2022 $ 3.24 Preferred Stock Consideration $ 137,858,446 Cash consideration: Closing amount paid to Stronghold by bank 121,392,455 Escrow deposit paid at closing 46,500,000 Cash paid for inventory and fixed assets 4,527,103 Cash paid for realized losses on August oil derivatives 1,777,925 Total cash consideration 174,197,483 Fair value of deferred payment liability 14,511,688 Fair value of consideration to be paid to seller 395,709,171 Direct transaction costs 9,162,143 Total consideration $ 404,871,314 Fair value of assets acquired: Oil and natural gas properties 441,318,763 Inventory and fixed assets 4,527,103 Amount attributable to assets acquired $ 445,845,866 Fair value of liabilities assumed: Suspense liability 1,651,596 Derivative liabilities, marked to market 24,784,406 Asset retirement obligations 14,538,550 Amount attributable to liabilities assumed $ 40,974,552 Net assets acquired $ 404,871,314 Approximately $11.7 $3.5 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to fluctuations in crude oil and natural gas prices on its production. It utilizes derivative strategies that consist of either a single derivative instrument or a combination of instruments to manage the variability in cash flows associated with the forecasted sale of its future domestic oil and natural gas production. While the use of derivative instruments may limit or partially reduce the downside risk of adverse commodity price movements, the use also may limit future income from favorable commodity price movements. The Company’s derivative financial instruments are recorded at fair value and included as either assets or liabilities in the accompanying Balance Sheets. The Company has not designated its derivative financial instruments as hedges for accounting purposes, and, as a result, any gains or losses resulting from changes in fair value of outstanding derivative financial instruments and from the settlement of derivative financial instruments are recognized in earnings and included as a component of “Other Income (Expense)” under the heading “Gain (loss) on derivative contracts” in the accompanying Statements of Operations. The use of derivative transactions involves the risk that the counterparties, which generally are financial institutions, will be unable to meet the financial terms of such transactions. At September 30, 2022, 100% of the Company’s derivative instruments are with lenders under its Credit Facility (as defined in Note 8). Non-performance risk is incorporated in the discount rate by adding the quoted bank (counterparty) credit default swap (CDS) rates to the risk free rate. Beginning September 1, the Company assumed the derivative liabilities (novated hedges) associated with its acquisition of the Stronghold assets (see Note 5), which are subject to master netting agreements. Additional derivative contracts with the same counterparty are also subject to netting. Still, in accordance with ASC 815-10-50-4B, the Company continues to classify the fair value of all its derivative positions on a gross basis in its corresponding Balance Sheets. The following presents the impact of the Company’s contracts on its Balance Sheets for the periods indicated. As of September 30, 2022 December 31, 2021 Commodity derivative instruments, marked to market: Derivative assets, current $ 24,206,887 $ — Discounted deferred premiums (10,884,874) — Derivative assets, current, net of premiums $ 13,322,013 $ — Derivative assets, noncurrent 15,204,782 — Discounted deferred premiums (3,658,800) — Derivative assets, noncurrent, net of premiums $ 11,545,982 $ — Derivative liabilities, current $ 23,767,689 $ 29,241,588 Derivative liabilities, noncurrent $ 8,734,388 $ — The components of “Gain (loss) on derivative contracts Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Oil derivatives: Realized gain (loss) on oil derivatives (13,958,195) (14,921,008) (47,690,961) (34,021,310) Unrealized gain (loss) on oil derivatives 49,680,492 8,200,688 48,360,099 (39,366,200) Gain (loss) on oil derivatives $ 35,722,297 $ (6,720,320) $ 669,138 $ (73,387,510) Natural gas derivatives: Realized gain (loss) on natural gas derivatives (902,921) — (902,921) 743,178 Unrealized gain (loss) on natural gas derivatives (1,968,187) — (1,968,187) (941,867) Gain (loss) on natural gas derivatives $ (2,871,108) $ — $ (2,871,108) $ (198,689) Gain (loss) on derivative contracts $ 32,851,189 $ (6,720,320) $ (2,201,970) $ (73,586,199) The components of “Cash (paid) for derivative settlements, net” are as follows for the respective periods: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cash flows from operating activities: Cash (paid) on oil derivatives $ (13,958,195) $ (14,921,008) $ (47,690,961) $ (34,030,310) Cash received (paid) on natural gas derivatives (902,921) — (902,921) 743,178 Cash (paid) for derivative settlements, net $ (14,861,116) $ (14,921,008) $ (48,593,882) $ (33,287,132) The following tables reflect the details of current derivative contracts as of September 30, 2022(Quantities are in barrels for the oil derivative contracts and in million British thermal units (MMBtu) for the natural gas derivative contracts.): Oil Hedges (WTI) 2022 2023 2024 Swaps: Hedged volume (BBL) 379,250 389,250 526,000 Weighted average swap price $ 54.89 $ 77.55 $ 65.90 Deferred premium puts: Hedged volume (BBL) 138,000 773,500 91,000 Weighted average strike price $ 97.93 $ 90.64 $ 83.75 Weighted average deferred premium price $ 11.81 $ 15.25 $ 17.32 Two-way collars: Hedged volume (BBL) 97,201 487,622 475,350 Weighted average put price $ 53.93 $ 52.16 $ 67.88 Weighted average call price $ 67.68 $ 62.94 $ 83.32 Three-way collars: Hedged volume (BBL) 89,985 66,061 — Weighted average first put price $ 40.00 $ 45.00 $ — Weighted average second put price $ 50.00 $ 55.00 $ — Weighted average call price $ 62.03 $ 80.05 $ — Gas Hedges (Henry Hub) 2022 2023 2024 NYMEX Swaps: Hedged volume (MMBtu) 46,313 175,421 — Weighted average swap price $ 2.51 $ 2.40 $ — Two-way collars: (1) Put hedged volume (MMBtu) 715,661 2,486,514 1,712,250 Weighted average put price $ 3.76 $ 3.18 $ 4.00 Call hedged volume (MMBtu) 435,061 2,306,514 1,712,250 Weighted average call price $ 10.22 $ 5.03 $ 6.29 Three-way collar: Hedged volume (MMBtu) 304,250 — — Weighted average first put price $ 2.20 $ — $ — Weighted average second put price $ 2.50 $ — $ — Weighted average call price $ 3.25 $ — $ — Weighted average deferred premium price $ 0.19 $ — $ — Gas Hedges (basis differential) 2022 2023 2024 Waha basis swaps: Hedged volume (MMBtu) 505,024 1,339,685 — Weighted average swap price (2) (3) $ — (1) The two-way collars for the fourth quarter of 2022 and first quarter of 2023 include 2x1 collars where the put volumes of 561,200 and 360,000 are two times the call volumes of 280,600 and 180,000 , respectively. (2) The WAHA basis swaps in place for the remainder of 2022 consist of five derivative contracts, each with a fixed price of the Henry Hub natural gas price less a fixed amount (weighted average of $0.57 per MMBtu). (3) The WAHA basis swaps in place for the calendar year of 2023 consist of two derivative contracts, each with a fixed price of the Henry Hub natural gas price less a fixed amount (weighted average of $0.55 per MMBtu). |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 7 – FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The authoritative guidance requires disclosure of the framework for measuring fair value and requires that fair value measurements be classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all inputs are observable in the marketplace throughout the full term of the derivative instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy. The Company continues to evaluate its inputs to ensure the fair value level classification is appropriate. When transfers between levels occur, it is the Company’s policy to assume that the transfer occurred at the date of the event or change in circumstances that caused the transfer. The fair values of the Company’s derivatives are not actively quoted in the open market. The Company uses a market approach to estimate the fair values of its derivative instruments on a recurring basis, utilizing commodity futures pricing for the underlying commodities provided by a reputable third party, a Level 2 fair value measurement. Other financial instruments include cash, accounts receivable and accounts payable. The carrying amount of these instruments approximates fair value because of their short-term nature. The Company’s long-term debt obligation bears interest at floating market rates, therefore the carrying amounts and fair value are approximately equal. The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its non-financial assets and liabilities. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments if events or changes in certain circumstances indicate that adjustments may be necessary. The following table summarizes the valuation of the Company’s assets and liabilities that are measured at fair value on a recurring basis(further detail in Note 6). Fair Value Measurement Classification Quoted prices in Active Markets for Identical Significant Assets Other Significant or Observable Unobservable (Liabilities) Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of December 31, 2021 Commodity Derivatives - Liabilities $ — $ (29,241,588) $ — $ (29,241,588) Total $ — $ (29,241,588) $ — $ (29,241,588) Fair Value Measurement Classification Quoted prices in Active Markets for Identical Significant Assets Other Significant or Observable Unobservable (Liabilities) Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of September 30, 2022 Commodity Derivatives - Assets $ — $ 24,867,995 $ — $ 24,867,995 Commodity Derivatives - Liabilities — (32,502,077) — (32,502,077) Total $ — $ (7,634,082) $ — $ (7,634,082) |
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT | 9 Months Ended |
Sep. 30, 2022 | |
REVOLVING LINE OF CREDIT | |
REVOLVING LINE OF CREDIT | NOTE 8 – REVOLVING LINE OF CREDIT In April 2019, the Company amended and restated its Credit Agreement with the Administrative Agent (as amended and restated, the “Credit Facility”). The amendment and restatement of the Credit Facility, among other things, increased the maximum borrowing amount to $1 billion, extended the maturity date through April 2024 and made other modifications to the terms of the Credit Facility. The fourth amendment on June 10, 2021, among other things, reaffirmed the borrowing base at $350 million and modified the definition for “Fall 2020 Borrowing Base Hedges,” from 4,000 barrels of oil per day to 3,100 barrels of oil per day for calendar year 2022. The fifth amendment on June 25, 2021 incorporated contractual fallback language for US dollar LIBOR denominated syndicated loans, which language provides for the transition away from LIBOR to an alternative reference rate, and incorporates certain provisions that clarify the rights of agents to recover from lenders erroneous payments made to such lenders. The Credit Facility is secured by a first lien on substantially all of the Company’s assets. The borrowing base is subject to periodic redeterminations, mandatory reductions, and further adjustments from time to time. The borrowing base is redetermined semi-annually in May and November. The May 2022 redetermination was postponed due to the Stronghold Acquisition (see Note 5). On August 31, 2022, the Company modified its Credit Facility through the Second Amended and Restated Credit Agreement. In conjunction with the Stronghold Acquisition, with the newly acquired assets put up for collateral, the Company established a borrowing base of $600 million. The syndicate was modified to add five lenders, replacing five exiting lenders. Rather than Eurodollar loans, the reference rate on the Second Amended and Restated Credit Agreement is the Standard Overnight Financing Rate (“SOFR”). Beginning June 30, 2023, the Credit Agreement will allow for the C to declare dividends for its equity owners, subject to certain limitations. The Credit Facility now allows for SOFR Loans and Base Rate Loans (as respectively defined in the Second Amended and Restated Credit Agreement). The interest rate on each SOFR Loan will be the adjusted term SOFR for the applicable interest period plus a margin between 3.0% and 4.0% (depending on the then-current level of borrowing base usage). The annual interest rate on each Base Rate Loan is (a) the greatest of (i) the Administrative Agent’s prime lending rate, (ii) the Federal Funds Rate (as defined in the Second Amended and Restated Credit Agreement) plus 0.5% per annum, (iii) the adjusted term SOFR determined on a daily basis for an interest period of one-month, plus 1.00% per annum and (iv) 0.00% per annum, plus (b) a margin between 2.0% and 3.0% per annum (depending on the then-current level of borrowing base usage). The Second Amended and Restated Credit Agreement contains certain covenants, which, among other things, require the maintenance of (i) a total Leverage Ratio (outstanding debt to adjusted earnings before interest, taxes, depreciation and amortization, exploration expenses, and all other non-cash charges acceptable to the Administrative Agent) of not more than 3.0 to 1.0 and (ii) a minimum ratio of Current Assets to Current Liabilities (as such terms are defined in the Second Amended and Restated Credit Agreement) of 1.0 to 1.0. The Second Amended and Restated Credit Agreement also contains other customary affirmative and negative covenants and events of default. As of September 30, 2022, $435,000,000 was outstanding under on the Credit Facility. The Company is in compliance with all covenants contained in the Second Amended and Restated Credit Agreement as of September 30, 2022. The Company is required to maintain on a rolling 24 month basis, hedging transactions in respect of crude oil and natural gas, on not less than 50% of the projected production from the proved, developed, producing oil and gas. If the borrowing base utilization is less than 25% at the hedge testing date and the leverage ratio is not greater than 1.25 to 1.00, the required hedging percentage for months 13 through 24 of the rolling 24 month period provided for shall be 0% from such hedge testing date to the next succeeding hedge testing date. If the borrowing base utilization percentage is equal to or greater than 25%, but less than 50% and the leverage ratio is not greater than 1.25 to 1.0, the required hedging percentage for months 13 through 24 of the rolling 24 month period provided for shall be 25% from such hedge testing date to the next succeeding hedge testing date. |
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION | 9 Months Ended |
Sep. 30, 2022 | |
ASSET RETIREMENT OBLIGATION. | |
ASSET RETIREMENT OBLIGATION | NOTE 9 – ASSET RETIREMENT OBLIGATION The Company records the obligation to plug and abandon oil and gas wells at the dates properties are either acquired or the wells are drilled. The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion expense and any revisions made to the costs or timing estimates. The asset retirement obligation is incurred using an annual credit-adjusted risk-free discount rate at the applicable dates. Changes in the asset retirement obligation were as follows: Balance, December 31, 2021 $ 15,292,054 Liabilities incurred 218,082 Liabilities acquired 14,538,550 Liabilities sold — Revision of previous estimates — Liabilities settled (1,239,634) Accretion expense 617,685 Balance, September 30, 2022 $ 29,426,737 |
STOCKHOLDERS EQUITY AND MEZZANI
STOCKHOLDERS EQUITY AND MEZZANINE EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | |
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY During the year ended December 31, 2021, 13,428,500 pre-funded common stock warrants and 442,600 common warrants were exercised. Gross proceeds from these transactions were $367,509. On April 5, April 6, and April 7, 2022, a total of 6,453,907 common stock warrants were exercised at a price of $0.80 per share for gross proceeds of $5,163,126. On August 19, August 25, and September 8, a total of 3,000,000 common stock warrants were exercised at a price of $0.80 per share for gross proceeds of $2,400,000. At September 30, 2022, there remained 19,907,793 unexercised common stock warrants, with an exercise price of $0.80 per share. Common Stock and Convertible Preferred Stock As part of the Stronghold Acquisition, 21,339,986 shares of our common stock were issued as “restricted shares” to Stronghold OpCo. Also as part of the Stronghold Acquisition, 153,176 shares of Preferred Stock were issued. Each share of Preferred Stock is automatically convertible into 277.7778 shares of common stock upon stockholder approval of the conversion (42,548,892 shares of common stock in total). We have classified the fair value of the Preferred Stock on our Balance Sheets under Mezzanine Equity. On September 26, 2022, a proxy statement was filed under the Securities Exchange Act of 1934 for our stockholders to consider and vote upon the conversion of the preferred shares into 42,548,892 shares of common stock. A special meeting of stockholders to vote on the conversion was held on October 27, 2022. Please see Note 13 – SUBSEQUENT EVENTS for more information regarding the stockholder meeting at which the conversion was approved. |
EMPLOYEE STOCK OPTIONS AND REST
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | 9 Months Ended |
Sep. 30, 2022 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | NOTE 11 – EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN Compensation expense charged against income for share-based awards during the three and nine months ended September 30, 2022 was $1,543,033 and $4,964,188, respectively, compared to $777,461 and $1,484,730 for the three and nine months ended September 30, 2021. These amounts are included in General and administrative expense in the accompanying financial statements. In 2011, the Company’s board of directors and stockholders approved and adopted a long-term incentive plan which allowed for the issuance of up to 2,500,000 shares of common stock through the grant of qualified stock options, non-qualified stock options and restricted stock. In 2013, the Company’s board of directors and stockholders approved an amendment to the long-term incentive plan, increasing the number of shares eligible under the plan to 5,000,000 shares. There were 341,155 shares remaining eligible for grant, either as stock options or as restricted stock, as of September 30, 2022. In May 2021, the Company’s board of directors and stockholders approved and adopted a long-term incentive plan (the “2021 Plan”) which allowed for the issuance of up to 9,900,000 shares, including 341,155 shares that were reserved but unissued under the prior plan, of common stock subject to the grant of qualified stock options, non-qualified stock options, restricted stock units and restricted stock. There were 5,577,843 shares eligible for grant under the 2021 Plan as of September 30, 2022. Stock Options A summary of the stock option activity as of September 30, 2022 and 2021, respectively, and changes during the three and nine months then ended is as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2020 465,500 $ 3.26 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, March 31, 2021 465,500 $ 3.26 3.00 Years $ 134,850 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, June 30, 2021 465,500 $ 3.26 2.75 Years $ 426,300 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, September 30, 2021 465,500 $ 3.26 2.61 Years $ 375,250 Exercisable, September 30, 2021 458,300 $ 3.13 2.57 Years Outstanding, December 31, 2021 365,500 $ 3.61 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, March 31, 2022 365,500 $ 3.61 2.21 Years $ 536,900 Granted — — Forfeited or rescinded — — Exercised (100,000) $ 2.00 Outstanding, June 30, 2022 265,500 4.21 2.14 Years $ 128,700 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, September 30, 2022 265,500 $ 4.21 1.89 Years $ 62,400 Exercisable, September 30, 2022 265,500 $ 4.21 1.89 Years The intrinsic values were calculated using the closing price on September 30, 2022 of $2.32 and the closing price on September 30, 2021 of $2.95. As of September 30, 2022, there was $0 of unrecognized compensation cost related to stock options. Restricted Stock A summary of the restricted stock activity as of September 30, 2022 and 2021, and changes during the three and nine months then ended is as follows: Weighted- Average Grant Restricted stock Date Fair Value Outstanding, December 31, 2020 2,132,297 $ 1.03 Granted — — Forfeited or rescinded — — Vested (94,350) 4.95 Outstanding, March 31, 2021 2,037,947 $ 0.85 Granted 1,196,102 2.77 Forfeited or rescinded — — Vested (3,480) 5.96 Outstanding, June 30, 2021 3,230,569 $ 1.55 Granted 29,554 2.69 Forfeited or rescinded — — Vested (12,500) 2.15 Outstanding, September 30, 2021 3,247,623 $ 1.56 Outstanding, December 31, 2021 2,572,596 $ 1.75 Granted 1,247,061 2.79 Forfeited or rescinded — — Vested — — Outstanding, March 31, 2022 3,819,657 $ 2.09 Granted 19,642 4.27 Forfeited or rescinded (17,204) 2.79 Vested (610,195) 2.80 Outstanding, June 30, 2022 3,211,900 $ 1.97 Granted 126,570 2.95 Forfeited or rescinded — — Vested (9,851) 2.69 Outstanding, September 30, 2022 3,328,619 $ 2.00 As of September 30, 2022 there was $3,468,926 of unrecognized compensation cost related to restricted stock grants that will be recognized over a weighted average period of 1.90 years. Grant activity for the nine months ended September 30, 2022 was primarily restricted shares for the annual long-term incentive plan awards for employees. Performance Stock Units A summary of the performance stock unit activity as of September 30, 2022 and 2021, and changes during the three and nine months then ended is as follows: Weighted- Performance Average Grant Stock Units Date Fair Value Outstanding, December 31, 2020 — $ — Granted — — Forfeited or rescinded — — Vested — — Outstanding, March 31, 2021 — $ — Granted — — Forfeited or rescinded — — Vested — — Outstanding, June 30, 2021 — $ — Granted — — Forfeited or rescinded — — Vested — — Outstanding, September 30, 2021 — $ — Outstanding, December 31, 2021 860,216 $ 3.87 Granted 860,216 3.65 Forfeited or rescinded — — Vested — — Outstanding, March 31, 2022 1,720,432 $ 3.76 Granted — — Forfeited or rescinded — — Vested — — Outstanding, June 30, 2022 1,720,432 $ 3.76 Granted — — Forfeited or rescinded — — Vested — — Outstanding, September 30, 2022 1,720,432 $ 3.76 As of September 30, 2022, there was $4,681,787 of unrecognized compensation cost related to performance stock units that will be recognized over a weighted average period of 1.79 years. |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 9 Months Ended |
Sep. 30, 2022 | |
CONTINGENCIES AND COMMITMENTS | |
CONTINGENCIES AND COMMITMENTS | NOTE 12 – CONTINGENCIES AND COMMITMENTS Standby Letters of Credit Surety Bonds |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS Effective October 1, 2022, the Company amended its Midland, Texas office lease to extend the term from October 1, 2022 to September 30, 2027 ( five year lease). This will be reflected in the lease liability and future payments in the leases note disclosure for the year ending December 31, 2022. On October 13, 2022, our Form S-3 Registration Statement was declared effective by the SEC in respect of 63,888,878 shares in aggregate of our common stock (21,339,986 shares of common stock issued at the closing of the Stronghold Acquisition and 42,548,892 shares of as-converted Preferred Stock), which shares may be offered by certain stockholders from time to time in one or more offerings. On October 27, 2022, the Company’s stockholders approved the issuance of, 42,548,892 shares of common stock upon conversion of the 153,176 shares of our Preferred Stock. The preferred shares were automatically converted into such In accordance with ASC Topic 855, Subsequent Events, the Company has evaluated all events subsequent to the balance sheet date of September 30, 2022, through the date of this report and has reported all material subsequent events. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Condensed Financial Statements | Condensed Financial Statements These unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. |
Organization and Nature of Operations | Organization and Nature of Operations – |
COVID - 19 | COVID-19 – |
Liquidity and Capital Considerations | Liquidity and Capital Considerations While changes in oil and natural gas prices affect the Company’s liquidity, the Company has put in place hedges to protect, to some extent, its cash flows from such price declines; however, if oil or natural gas prices rapidly deteriorate due to unanticipated economic conditions, this could have a material adverse effect on the Company’s cash flows in spite of our hedging activities. The Company expects ongoing oil price volatility over the short term. Extended depressed oil prices have historically had and could have a material adverse impact on the Company’s oil revenue, which may be mitigated to some extent by the Company’s hedge contracts. The Company is mindful of oil price volatility and its impact on the Company’s liquidity. The Company believes that it has the ability to continue to fund its operations and service its debt by using cash on hand and cash flows from operations. |
Use of Estimates | Use of Estimates |
Fair Value Measurements | Fair Value Measurements |
Fair Values of Financial Instruments | Fair Values of Financial Instruments |
Derivative Instruments and Commodity Risk Activities | Derivative Instruments and Commodity Risk Activities Any gains or losses resulting from changes in fair value of outstanding derivative financial instruments and from the settlement of derivative financial instruments are recognized in earnings and included as a component of Other income (expense) in the Statements of Operations. When applicable, the Company records all derivative instruments, other than those that meet the normal purchases and sales exception, on the Balance Sheets as either an asset or liability measured at fair value. Changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. The change in fair value resulted in the recognition of an unrealized gain of $47,712,305 for the three months ended September 30, 2022 and an unrealized gain of $46,391,912 for the nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the change in fair value resulted in the recognition of an unrealized gain of $8,200,688 and an unrealized loss of $40,308,067, respectively, on derivative contracts. During the three and nine months ended September 30, 2022, the Company had realized losses of $14,861,116 and $48,593,882, respectively, on derivatives. During the three and nine months ended September 30, 2021, the Company had realized losses of $14,921,008 and $33,278,132, respectively, on derivatives net of a realized gain of $581,424 in March 2021 from unwinding the Company’s then held gas swaps. |
Concentration of Credit Risk and Major Customers | Concentration of Credit Risk and Major Customers At September 30, 2022, approximately 94% of the Company’s accounts receivables and joint interest billing receivables are from purchasers of oil and gas. Oil and gas sales are generally unsecured. The Company also has joint interest billing receivables which are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. Accounts receivable from joint interest owners or purchasers outstanding longer than the contractual payment terms are considered past due.The Company has not had any significant credit losses in the past and believes its accounts and joint interest billing receivables are collectable. Accordingly, no material allowance for credit losses has been provided at September 30, 2022. |
Oil and Gas Properties | Oil and Gas Properties All capitalized costs of oil and gas properties, plus estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves as determined by the Company’s independent petroleum engineers. The Company evaluates oil and gas properties for impairment quarterly. The Company did not incur a write down of oil and natural gas properties as a result of the ceiling test for the three and nine months ended September 30, 2022 or for the three and nine months ended September 30, 2021. Depreciation, depletion and amortization expense for the three and nine months ended September 30, 2022 was $14,324,502 and $34,854,993, respectively, based on depletion at the rate of $11.59 and $11.95, respectively, per barrel of oil equivalent compared to $9,310,524 and $26,693,808, respectively, based on depletion at the rate of $12.12 and $11.64 per barrel of oil equivalent for the three and nine months ended September 30, 2021. These amounts include $160,928 and $437,015, respectively, of depreciation and amortization for the three and nine months ended September 30, 2022, compared to $120,817 and $276,677, respectively, of depreciation and amortization for the three and nine months ended September 30, 2021. |
Equipment, Vehicles and Leasehold Improvements | Equipment, Vehicles and Leasehold Improvements |
Asset Retirement Obligation | Asset Retirement Obligation |
Share-Based Employee Compensation | Share-Based Employee Compensation |
Share-Based Compensation to Non-Employees | Share-Based Compensation to Non-Employees |
Income Taxes | Income Taxes Since December 31, 2020, the Company has determined that a full valuation allowance is necessary due to the Company assessment that it is more likely than not that it will be unable to obtain the benefits of its deferred tax assets due to the Company’s history of taxable losses. During the nine months ended September 30, 2022, the Company determined that certain existing deferred tax assets will not be offset by existing deferred tax liabilities as a result of the 80% limitation on the utilization net operating losses incurred after 2017. Accordingly, for the three and nine months ended September 30, 2022, the Company recorded federal income tax expense of $3,611,381 and $4,625,429, respectively. The Company recorded state deferred income tax expense of $667,666 and $1,204,579, respectively, during the three and nine months ended September 30, 2022. The Company recorded a state current income tax expense of $36,736 during the three and nine months ended September 30, 2022. The Company recorded a state deferred income tax benefit of $48,701 and expense of $141,943, respectively, for the three and nine months ended September 30, 2021. The Company has immaterial operations in New Mexico which is in a net deferred tax asset position for which a full valuation allowance is still recorded. The shares issued for the Stronghold Acquisition (further discussed in Note 5) resulted in the Company having an ownership change under Section 382 of the Internal Revenue Code. Section 382 limits the availability of certain tax attributes, including net operating losses and disallowed interest carryforwards, to offset future taxable income of the Company. In evaluating its need for a valuation allowance against its deferred tax assets, the Company has estimated the amount of tax attributes related to the pre-ownership change period to be available under Section 382 in periods in which it expects deferred tax liabilities to be realized based on currently available information. Based on its current analysis, the Company does not anticipate any material tax attributes to expire unused as result of the section 382 ownership change; however, the ultimate timing in the amount of tax attributes available in future periods may be different than our current estimate and will be determined in each year as new information becomes available. Changes in expectation in the timing of the availability of our tax attributes could result in adjustments to the valuation allowance in future years as we update our analysis based on new information. For the nine months ended September 30, 2022, the Company’s overall effective tax rate of 4.5% was primarily impacted by the valuation allowance on its federal net deferred tax asset and state income taxes. |
Three Stream Reporting | Three-Stream Reporting |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes In October 2020, the FASB issued ASU No. 2020-10, “ Codification Improvements In August 2020, the FASB issued ASU No. 2020-06, “ Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)” Recent Accounting Pronouncements Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” Reference Rate Reform (Topic 848): Scope In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue | For The Three Months For The Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Operating Revenues Oil $ 86,413,665 $ 45,889,548 $ 229,532,827 $ 126,927,318 Natural gas 4,655,002 $ 3,486,628 14,678,747 9,711,492 Natural gas liquids 3,340,281 — 3,340,281 — Total operating revenues $ 94,408,948 $ 49,376,176 $ 247,551,855 $ 136,638,810 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
Schedule of future lease payments of operating lease and finance lease | 2022 2023 2024 2025 2026 Operating lease payments (1) $ 87,282 $ 356,991 $ 376,855 $ 384,719 $ 110,096 Financing lease payments (2) 109,582 438,328 372,056 99,796 — (1) The weighted average discount rate as of September 30, 2022 for operating leases was 4.50% . Based on this rate, the future lease payments above include imputed interest of $103,704 . The weighted average remaining term of operating leases was 3.55 years. (2) The weighted average discount rate as of September 30, 2022 for financing leases was 4.00% . Based on this rate, the future lease payments above include imputed interest of $48,667 . The weighted average remaining term of financing leases was 2.38 years. |
Schedule of reconciliation between the undiscounted future cash flows and the operating and financing lease liabilities | As of September 30, 2022 December 31, 2021 Operating lease liability, current portion $ 306,715 $ 290,766 Operating lease liability, non-current portion 905,524 1,138,319 Operating lease liability, total $ 1,212,239 $ 1,429,085 Total undiscounted future cash flows 1,315,943 1,577,786 Imputed interest 103,704 148,701 Undiscounted future cash flows less imputed interest $ 1,212,239 $ 1,429,085 Financing lease liability, current portion $ 406,890 $ 316,514 Financing lease liability, non-current portion 564,205 343,727 Financing lease liability, total $ 971,095 $ 660,241 Total undiscounted future cash flows 1,019,762 692,091 Imputed interest 48,667 31,850 Undiscounted future cash flows less imputed interest $ 971,095 $ 660,241 |
Schedule of lease cost | Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 Operating lease costs $ 83,590 $ 83,589 $ 250,770 $ 439,896 Short term lease costs (1) 639,708 964,873 1,937,310 2,903,387 Financing lease costs: Amortization of financing lease assets (2) 106,982 85,367 334,447 189,831 Interest on lease liabilities (3) 10,391 5,160 24,184 14,166 (1) Amount included in Lease operating expenses (2) Amount included in Depreciation, depletion and amortization (3) Amount included in Interest expense |
EARNINGS (LOSS) PER SHARE INF_2
EARNINGS (LOSS) PER SHARE INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS (LOSS) PER SHARE INFORMATION | |
Schedule of earnings per share, Basic and Diluted | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Net Income (Loss) $ 75,085,891 $ 14,163,934 $ 124,142,356 $ (20,789,318) Basic Weighted-Average Shares Outstanding 115,376,280 99,358,504 107,349,184 99,251,532 Effect of dilutive securities: Stock options 52,110 135,536 93,688 — Restricted stock units 1,908,662 1,463,690 2,135,675 — Performance stock units 196,520 — 235,440 — Common warrants 19,884,296 20,263,018 20,180,729 — Convertible preferred stock 14,337,127 — 4,831,559 — Diluted Weighted-Average Shares Outstanding 151,754,995 121,220,748 134,826,275 99,251,532 Basic Earnings (Loss) per Share $ 0.65 $ 0.14 $ 1.16 $ (0.21) Diluted Earnings (Loss) per Share $ 0.49 $ 0.12 $ 0.92 $ (0.21) |
ACQUISITIONS & DIVESTITURES (Ta
ACQUISITIONS & DIVESTITURES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ACQUISITIONS & DIVESTITURES | |
Schedule of preliminary allocation of total cost of acquisition to assets acquired and liabilities assumed | The following table represents the preliminary allocation of the total cost of the Stronghold Acquisition to the assets acquired and liabilities assumed as of the Stronghold Acquisition date: Consideration: Shares of Ring Common Stock issued 21,339,986 Ring Common Stock price as of August 31, 2022 $ 3.24 Common Stock Consideration $ 69,141,555 Shares of Ring Preferred Stock issued 153,176 Aggregate Liquidation Preference $ 153,176,000 Conversion Price $ 3.60 As-Converted Shares of Ring Common Stock 42,548,903 Ring Common Stock Price as of August 31, 2022 $ 3.24 Preferred Stock Consideration $ 137,858,446 Cash consideration: Closing amount paid to Stronghold by bank 121,392,455 Escrow deposit paid at closing 46,500,000 Cash paid for inventory and fixed assets 4,527,103 Cash paid for realized losses on August oil derivatives 1,777,925 Total cash consideration 174,197,483 Fair value of deferred payment liability 14,511,688 Fair value of consideration to be paid to seller 395,709,171 Direct transaction costs 9,162,143 Total consideration $ 404,871,314 Fair value of assets acquired: Oil and natural gas properties 441,318,763 Inventory and fixed assets 4,527,103 Amount attributable to assets acquired $ 445,845,866 Fair value of liabilities assumed: Suspense liability 1,651,596 Derivative liabilities, marked to market 24,784,406 Asset retirement obligations 14,538,550 Amount attributable to liabilities assumed $ 40,974,552 Net assets acquired $ 404,871,314 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of impact of Company's contracts on its Balance Sheets | As of September 30, 2022 December 31, 2021 Commodity derivative instruments, marked to market: Derivative assets, current $ 24,206,887 $ — Discounted deferred premiums (10,884,874) — Derivative assets, current, net of premiums $ 13,322,013 $ — Derivative assets, noncurrent 15,204,782 — Discounted deferred premiums (3,658,800) — Derivative assets, noncurrent, net of premiums $ 11,545,982 $ — Derivative liabilities, current $ 23,767,689 $ 29,241,588 Derivative liabilities, noncurrent $ 8,734,388 $ — |
Schedule of components of gain (loss) on derivative contracts | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Oil derivatives: Realized gain (loss) on oil derivatives (13,958,195) (14,921,008) (47,690,961) (34,021,310) Unrealized gain (loss) on oil derivatives 49,680,492 8,200,688 48,360,099 (39,366,200) Gain (loss) on oil derivatives $ 35,722,297 $ (6,720,320) $ 669,138 $ (73,387,510) Natural gas derivatives: Realized gain (loss) on natural gas derivatives (902,921) — (902,921) 743,178 Unrealized gain (loss) on natural gas derivatives (1,968,187) — (1,968,187) (941,867) Gain (loss) on natural gas derivatives $ (2,871,108) $ — $ (2,871,108) $ (198,689) Gain (loss) on derivative contracts $ 32,851,189 $ (6,720,320) $ (2,201,970) $ (73,586,199) |
Schedule of components of cash (paid) for derivative settlements, net | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cash flows from operating activities: Cash (paid) on oil derivatives $ (13,958,195) $ (14,921,008) $ (47,690,961) $ (34,030,310) Cash received (paid) on natural gas derivatives (902,921) — (902,921) 743,178 Cash (paid) for derivative settlements, net $ (14,861,116) $ (14,921,008) $ (48,593,882) $ (33,287,132) |
Schedule of current derivative contracts | The following tables reflect the details of current derivative contracts as of September 30, 2022(Quantities are in barrels for the oil derivative contracts and in million British thermal units (MMBtu) for the natural gas derivative contracts.): Oil Hedges (WTI) 2022 2023 2024 Swaps: Hedged volume (BBL) 379,250 389,250 526,000 Weighted average swap price $ 54.89 $ 77.55 $ 65.90 Deferred premium puts: Hedged volume (BBL) 138,000 773,500 91,000 Weighted average strike price $ 97.93 $ 90.64 $ 83.75 Weighted average deferred premium price $ 11.81 $ 15.25 $ 17.32 Two-way collars: Hedged volume (BBL) 97,201 487,622 475,350 Weighted average put price $ 53.93 $ 52.16 $ 67.88 Weighted average call price $ 67.68 $ 62.94 $ 83.32 Three-way collars: Hedged volume (BBL) 89,985 66,061 — Weighted average first put price $ 40.00 $ 45.00 $ — Weighted average second put price $ 50.00 $ 55.00 $ — Weighted average call price $ 62.03 $ 80.05 $ — Gas Hedges (Henry Hub) 2022 2023 2024 NYMEX Swaps: Hedged volume (MMBtu) 46,313 175,421 — Weighted average swap price $ 2.51 $ 2.40 $ — Two-way collars: (1) Put hedged volume (MMBtu) 715,661 2,486,514 1,712,250 Weighted average put price $ 3.76 $ 3.18 $ 4.00 Call hedged volume (MMBtu) 435,061 2,306,514 1,712,250 Weighted average call price $ 10.22 $ 5.03 $ 6.29 Three-way collar: Hedged volume (MMBtu) 304,250 — — Weighted average first put price $ 2.20 $ — $ — Weighted average second put price $ 2.50 $ — $ — Weighted average call price $ 3.25 $ — $ — Weighted average deferred premium price $ 0.19 $ — $ — Gas Hedges (basis differential) 2022 2023 2024 Waha basis swaps: Hedged volume (MMBtu) 505,024 1,339,685 — Weighted average swap price (2) (3) $ — (1) The two-way collars for the fourth quarter of 2022 and first quarter of 2023 include 2x1 collars where the put volumes of 561,200 and 360,000 are two times the call volumes of 280,600 and 180,000 , respectively. (2) The WAHA basis swaps in place for the remainder of 2022 consist of five derivative contracts, each with a fixed price of the Henry Hub natural gas price less a fixed amount (weighted average of $0.57 per MMBtu). (3) The WAHA basis swaps in place for the calendar year of 2023 consist of two derivative contracts, each with a fixed price of the Henry Hub natural gas price less a fixed amount (weighted average of $0.55 per MMBtu). |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of valuation of assets and liabilities that are measured at fair value on a recurring basis | Fair Value Measurement Classification Quoted prices in Active Markets for Identical Significant Assets Other Significant or Observable Unobservable (Liabilities) Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of December 31, 2021 Commodity Derivatives - Liabilities $ — $ (29,241,588) $ — $ (29,241,588) Total $ — $ (29,241,588) $ — $ (29,241,588) Fair Value Measurement Classification Quoted prices in Active Markets for Identical Significant Assets Other Significant or Observable Unobservable (Liabilities) Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of September 30, 2022 Commodity Derivatives - Assets $ — $ 24,867,995 $ — $ 24,867,995 Commodity Derivatives - Liabilities — (32,502,077) — (32,502,077) Total $ — $ (7,634,082) $ — $ (7,634,082) |
ASSET RETIREMENT OBLIGATION (Ta
ASSET RETIREMENT OBLIGATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ASSET RETIREMENT OBLIGATION. | |
Schedule of asset retirement obligation | Balance, December 31, 2021 $ 15,292,054 Liabilities incurred 218,082 Liabilities acquired 14,538,550 Liabilities sold — Revision of previous estimates — Liabilities settled (1,239,634) Accretion expense 617,685 Balance, September 30, 2022 $ 29,426,737 |
EMPLOYEE STOCK OPTIONS AND RE_2
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | |
Summary of stock options activity | Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2020 465,500 $ 3.26 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, March 31, 2021 465,500 $ 3.26 3.00 Years $ 134,850 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, June 30, 2021 465,500 $ 3.26 2.75 Years $ 426,300 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, September 30, 2021 465,500 $ 3.26 2.61 Years $ 375,250 Exercisable, September 30, 2021 458,300 $ 3.13 2.57 Years Outstanding, December 31, 2021 365,500 $ 3.61 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, March 31, 2022 365,500 $ 3.61 2.21 Years $ 536,900 Granted — — Forfeited or rescinded — — Exercised (100,000) $ 2.00 Outstanding, June 30, 2022 265,500 4.21 2.14 Years $ 128,700 Granted — — Forfeited or rescinded — — Exercised — — Outstanding, September 30, 2022 265,500 $ 4.21 1.89 Years $ 62,400 Exercisable, September 30, 2022 265,500 $ 4.21 1.89 Years |
Summary of restricted stock activity | Weighted- Average Grant Restricted stock Date Fair Value Outstanding, December 31, 2020 2,132,297 $ 1.03 Granted — — Forfeited or rescinded — — Vested (94,350) 4.95 Outstanding, March 31, 2021 2,037,947 $ 0.85 Granted 1,196,102 2.77 Forfeited or rescinded — — Vested (3,480) 5.96 Outstanding, June 30, 2021 3,230,569 $ 1.55 Granted 29,554 2.69 Forfeited or rescinded — — Vested (12,500) 2.15 Outstanding, September 30, 2021 3,247,623 $ 1.56 Outstanding, December 31, 2021 2,572,596 $ 1.75 Granted 1,247,061 2.79 Forfeited or rescinded — — Vested — — Outstanding, March 31, 2022 3,819,657 $ 2.09 Granted 19,642 4.27 Forfeited or rescinded (17,204) 2.79 Vested (610,195) 2.80 Outstanding, June 30, 2022 3,211,900 $ 1.97 Granted 126,570 2.95 Forfeited or rescinded — — Vested (9,851) 2.69 Outstanding, September 30, 2022 3,328,619 $ 2.00 |
Summary of performance stock unit activity | Weighted- Performance Average Grant Stock Units Date Fair Value Outstanding, December 31, 2020 — $ — Granted — — Forfeited or rescinded — — Vested — — Outstanding, March 31, 2021 — $ — Granted — — Forfeited or rescinded — — Vested — — Outstanding, June 30, 2021 — $ — Granted — — Forfeited or rescinded — — Vested — — Outstanding, September 30, 2021 — $ — Outstanding, December 31, 2021 860,216 $ 3.87 Granted 860,216 3.65 Forfeited or rescinded — — Vested — — Outstanding, March 31, 2022 1,720,432 $ 3.76 Granted — — Forfeited or rescinded — — Vested — — Outstanding, June 30, 2022 1,720,432 $ 3.76 Granted — — Forfeited or rescinded — — Vested — — Outstanding, September 30, 2022 1,720,432 $ 3.76 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Unrealized gain on derivative contracts | $ 47,712,305 | $ (8,200,688) | $ (46,391,912) | $ (40,308,067) | ||
Realized losses on derivatives | (14,861,116) | (14,921,008) | (48,593,882) | (33,278,132) | ||
Net realized gain of derivative | $ 581,424 | |||||
Cash in excess of federally insured | $ 640,522 | $ 640,522 | $ 1,936,805 | |||
Percentage of accounts receivables | 94% | 94% | ||||
Depreciation, depletion and amortization | $ 14,324,502 | 9,310,524 | $ 34,854,993 | 26,693,808 | ||
Depletion rate per barrel | 11.59 | 12.12 | 11.95 | 11.64 | ||
Depreciation and amortization | 160,928 | 120,817 | 437,015 | 276,677 | ||
Federal income tax expense | 3,611,381 | 4,625,429 | ||||
State current income tax expense | 36,736 | 36,736 | ||||
Deferred state and local income tax benefit | $ 667,666 | $ 48,701 | $ 1,204,579 | $ 141,943 | ||
Effective tax rate impacted by valuation allowance on its federal net deferred tax asset and state income taxes | 4.50% | |||||
Minimum | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life (in years) | 3 years | |||||
Maximum | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Estimated useful life (in years) | 10 years | |||||
Sales Revenue, Net | Customer Concentration Risk | Customer One | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 69% | |||||
Sales Revenue, Net | Customer Concentration Risk | Customer Two | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 4% | |||||
Accounts Receivable | Customer One | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Percentage of accounts receivables | 58% | 58% | ||||
Accounts Receivable | Customer Two | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||||
Percentage of accounts receivables | 12% | 12% |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUE RECOGNITION | ||||
Oil | $ 86,413,665 | $ 45,889,548 | $ 229,532,827 | $ 126,927,318 |
Natural gas | 4,655,002 | 3,486,628 | 14,678,747 | 9,711,492 |
Natural gas liquids | 3,340,281 | 3,340,281 | ||
Total operating revenues | $ 94,408,948 | $ 49,376,176 | $ 247,551,855 | $ 136,638,810 |
LEASES - Future lease payments
LEASES - Future lease payments (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
LEASES | |
Lease term of financing leases for vehicles | 36 months |
Operating lease payments | |
2022 | $ 87,282 |
2023 | 356,991 |
2024 | 376,855 |
2025 | 384,719 |
2026 | $ 110,096 |
Weighted average discount rate | 4.50% |
Imputed interest | $ 103,704 |
Weighted average remaining term | 3 years 6 months 18 days |
Financing lease payments | |
2022 | $ 109,582 |
2023 | 438,328 |
2024 | 372,056 |
2025 | $ 99,796 |
Weighted average discount rate | 4% |
Imputed interest | $ 48,667 |
Weighted average remaining term | 2 years 4 months 17 days |
LEASES - Reconciliation between
LEASES - Reconciliation between the undiscounted future cash flows in the table above and the operating and financing lease liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Operating lease liability: | ||
Operating lease liability, current portion | $ 306,715 | $ 290,766 |
Operating lease liability, non-current portion | 905,524 | 1,138,319 |
Operating lease liability, total | 1,212,239 | 1,429,085 |
Total undiscounted future cash flows | 1,315,943 | 1,577,786 |
Imputed interest | 103,704 | 148,701 |
Undiscounted future cash flows less imputed interest | 1,212,239 | 1,429,085 |
Financing lease liability: | ||
Financing lease liability, current portion | 406,890 | 316,514 |
Financing lease liability, non-current portion | 564,205 | 343,727 |
Financing lease liability, total | 971,095 | 660,241 |
Total undiscounted future cash flows | 1,019,762 | 692,091 |
Imputed interest | 48,667 | 31,850 |
Undiscounted future cash flows less imputed interest | $ 971,095 | $ 660,241 |
LEASES - Supplemental informati
LEASES - Supplemental information regarding cash flows from operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
LEASES | ||||
Operating lease costs | $ 83,590 | $ 83,589 | $ 250,770 | $ 439,896 |
Short term lease costs | 639,708 | 964,873 | 1,937,310 | 2,903,387 |
Financing lease costs: | ||||
Amortization of financing lease assets | 106,982 | 85,367 | 334,447 | 189,831 |
Interest on lease liabilities | $ 10,391 | $ 5,160 | $ 24,184 | $ 14,166 |
EARNINGS (LOSS) PER SHARE INF_3
EARNINGS (LOSS) PER SHARE INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive securities excluded from computation of earnings per share | ||||||||
Net income (loss) | $ 75,085,891 | $ 41,944,422 | $ 7,112,043 | $ 14,163,934 | $ (15,887,159) | $ (19,066,093) | $ 124,142,356 | $ (20,789,318) |
Basic Weighted-Average Shares Outstanding | 115,376,280 | 99,358,504 | 107,349,184 | 99,251,532 | ||||
Effect of dilutive securities: | ||||||||
Diluted Weighted-Average Shares Outstanding | 151,754,995 | 121,220,748 | 134,826,275 | 99,251,532 | ||||
Basic Earnings (Loss) per share | $ 0.65 | $ 0.14 | $ 1.16 | $ (0.21) | ||||
Diluted Earnings (Loss) per share | $ 0.49 | $ 0.12 | $ 0.92 | $ (0.21) | ||||
Common warrants | ||||||||
Effect of dilutive securities: | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 19,884,296 | 20,263,018 | 20,180,729 | |||||
Convertible preferred stock | ||||||||
Effect of dilutive securities: | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 14,337,127 | 4,831,559 | ||||||
Restricted Stock | ||||||||
Effect of dilutive securities: | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 1,908,662 | 1,463,690 | 2,135,675 | |||||
Performance Shares | ||||||||
Effect of dilutive securities: | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 196,520 | 235,440 | ||||||
Stock options | ||||||||
Effect of dilutive securities: | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 52,110 | 135,536 | 93,688 |
EARNINGS (LOSS) PER SHARE INF_4
EARNINGS (LOSS) PER SHARE INFORMATION - Additional information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restricted Stock | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Number of shares were excluded from the computation of diluted earnings per share | 37,487 | 14,709 | 11,312 | 3,247,623 |
Performance stock units | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Number of shares were excluded from the computation of diluted earnings per share | 860,212 | 798,768 | ||
Common Stock | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Number of shares were excluded from the computation of diluted earnings per share | 70,500 | 70,500 | 70,500 | 465,500 |
Common warrants | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Number of shares were excluded from the computation of diluted earnings per share | 29,519,500 |
ACQUISITIONS & DIVESTITURES - S
ACQUISITIONS & DIVESTITURES - Stronghold Acquisition (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Aug. 31, 2022 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Jul. 01, 2022 a | Dec. 31, 2021 USD ($) $ / shares | Jun. 10, 2021 USD ($) | Apr. 30, 2019 USD ($) | |
ACQUISITIONS & DIVESTITURES | ||||||||||
Credit facility, maximum borrowing capacity | $ 600,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | |||||
Credit facility, borrowing base | 600,000,000 | $ 350,000,000 | $ 350,000,000 | |||||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Asset retirement obligation | $ 29,426,737 | $ 29,426,737 | $ 29,426,737 | $ 15,292,054 | ||||||
Revenues | 94,408,948 | $ 49,376,176 | 247,551,855 | $ 136,638,810 | ||||||
Direct operating expenses | $ 40,837,082 | $ 24,989,161 | $ 101,641,744 | $ 72,752,027 | ||||||
Stronghold Acquisition | ||||||||||
ACQUISITIONS & DIVESTITURES | ||||||||||
Acquired interests in oil and gas leases and related property, area of land | a | 37,000 | |||||||||
Fair value of consideration paid | 395,709,171 | |||||||||
Purchase price paid in cash at closing | 174,197,483 | |||||||||
Payable in cash after the six-month anniversary of closing date of the acquisition | $ 14,511,688 | |||||||||
Deferred cash payment, payment period after closing date of the acquisition | 6 months | |||||||||
Payment for inventory and vehicles | $ 4,500,000 | |||||||||
Payment for August oil derivative settlements for the novated hedges | $ 1,800,000 | |||||||||
Stock issued | shares | 21,339,986 | |||||||||
Derivative liabilities, marked to market | $ 24,784,406 | |||||||||
Amount of items in suspense | 1,651,596 | |||||||||
Asset retirement obligation | $ 14,538,550 | |||||||||
Revenues | 0 | |||||||||
Direct operating expenses | $ 0 | |||||||||
Stronghold Acquisition | Series A Convertible Preferred Stock | ||||||||||
ACQUISITIONS & DIVESTITURES | ||||||||||
Stock issued | shares | 153,176 | 153,176 | ||||||||
Preferred Stock, par value | $ / shares | $ 0.001 | |||||||||
Stronghold Acquisition | Common stock | ||||||||||
ACQUISITIONS & DIVESTITURES | ||||||||||
Stock issued | shares | 21,339,986 | 21,339,986 |
ACQUISITIONS & DIVESTITURES -_2
ACQUISITIONS & DIVESTITURES - Stronghold Acquisition - Preliminary allocation of total cost of acquisition to assets acquired and liabilities assumed (Details) - USD ($) | 9 Months Ended | ||
Aug. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Cash consideration: | |||
Cash paid by bank to Stronghold on closing | $ 121,392,455 | ||
Fair value of assets acquired: | |||
Oil and natural gas properties | 1,418,931,111 | $ 883,844,745 | |
Total Assets | 1,251,310,893 | 684,157,329 | |
Fair value of liabilities assumed: | |||
Asset retirement obligation | 29,426,737 | 15,292,054 | |
Total Liabilities | $ 607,281,499 | $ 383,533,122 | |
Stronghold Acquisition | |||
Consideration: | |||
Shares of Ring Common Stock issued | 21,339,986 | ||
Ring Common Stock price as of August 31, 2022 | $ 3.24 | ||
Common Stock Consideration | $ 69,141,555 | ||
Shares of Ring Preferred Stock issued | 153,176 | ||
Aggregate Liquidation Preference | $ 153,176,000 | ||
Conversion Price | $ 3.60 | ||
As-Converted Shares of Ring Common Stock | 42,548,903 | ||
Preferred Stock Consideration | $ 137,858,446 | ||
Cash consideration: | |||
Cash paid by bank to Stronghold on closing | 121,392,455 | ||
Deposit in escrow | 46,500,000 | ||
Cash paid for inventory and fixed assets acquired | 4,527,103 | ||
Cash paid for realized August oil derivative losses | 1,777,925 | ||
Cash consideration | 174,197,483 | ||
Fair value of deferred payment liability | 14,511,688 | ||
Fair value of consideration to be paid to seller | 395,709,171 | ||
Cash consideration | 174,197,483 | ||
Direct transaction costs | 9,162,143 | ||
Total consideration | 404,871,314 | ||
Fair value of assets acquired: | |||
Oil and natural gas properties | 441,318,763 | ||
Inventory and fixed assets | 4,527,103 | ||
Total Assets | 445,845,866 | ||
Fair value of liabilities assumed: | |||
Suspense liability | 1,651,596 | ||
Derivative liabilities, marked to market | 24,784,406 | ||
Asset retirement obligation | 14,538,550 | ||
Total Liabilities | 40,974,552 | ||
Total consideration | $ 404,871,314 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Impact of Company's contracts on its Balance Sheets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Derivative assets, current | $ 24,206,887 | |
Discounted deferred premiums | (10,884,874) | |
Derivative assets, current, net of premiums | 13,322,013 | |
Derivative assets, noncurrent | 15,204,782 | |
Discounted deferred premiums | (3,658,800) | |
Derivative assets, noncurrent, net of premiums | 11,545,982 | |
Liabilities | ||
Derivative liabilities, current | 23,767,689 | $ 29,241,588 |
Derivative liabilities, noncurrent | $ 8,734,388 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Components of gain (loss) on derivative contracts (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Unrealized gain (loss) on derivatives | $ (2,201,970) | $ (73,586,199) | ||
Gain (loss) on derivative contracts | $ 32,851,189 | $ (6,720,320) | $ (2,201,970) | (73,586,199) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | |||
Oil | ||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Realized gain (loss) on derivatives | (13,958,195) | (14,921,008) | $ (47,690,961) | (34,021,310) |
Unrealized gain (loss) on derivatives | 49,680,492 | 8,200,688 | 48,360,099 | (39,366,200) |
Gain (loss) on derivative contracts | 35,722,297 | $ (6,720,320) | 669,138 | (73,387,510) |
Natural Gas | ||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Realized gain (loss) on derivatives | (902,921) | (902,921) | 743,178 | |
Unrealized gain (loss) on derivatives | (1,968,187) | (1,968,187) | (941,867) | |
Gain (loss) on derivative contracts | $ (2,871,108) | $ (2,871,108) | $ (198,689) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Components of cash (paid) for derivative settlements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||||
Cash (paid) for derivative settlements, net | $ (14,861,116) | $ (14,921,008) | $ (48,593,882) | $ (33,287,132) |
Oil | ||||
Cash flows from operating activities | ||||
Cash (paid) for derivative settlements, net | (13,958,195) | $ (14,921,008) | (47,690,961) | (34,030,310) |
Natural Gas | ||||
Cash flows from operating activities | ||||
Cash (paid) for derivative settlements, net | $ (902,921) | $ (902,921) | $ 743,178 |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS - Current derivative contracts (Details) | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 USD ($) contract $ / MMBTU $ / bbl |
Oil | Swap | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 379,250 | ||
Weighted average swap price | 54.89 | ||
Oil | Swap | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 389,250 | ||
Weighted average swap price | 77.55 | ||
Oil | Swap | 2024 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 526,000 | ||
Weighted average swap price | 65.90 | ||
Oil | Deferred premium puts | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | $ | 138,000 | ||
Weighted average strike price | 97.93 | ||
Weighted average deferred premium price | 11.81 | ||
Oil | Deferred premium puts | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | $ | 773,500 | ||
Weighted average strike price | 90.64 | ||
Weighted average deferred premium price | 15.25 | ||
Oil | Deferred premium puts | 2024 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | $ | 91,000 | ||
Weighted average strike price | 83.75 | ||
Weighted average deferred premium price | 17.32 | ||
Oil | Two-way collars | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 97,201 | ||
Weighted average put price | 53.93 | ||
Weighted average call price | 67.68 | ||
Oil | Two-way collars | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 487,622 | ||
Weighted average put price | 52.16 | ||
Weighted average call price | 62.94 | ||
Oil | Two-way collars | 2024 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 475,350 | ||
Weighted average put price | 67.88 | ||
Weighted average call price | 83.32 | ||
Oil | Three-way collars | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | $ | 89,985 | ||
Weighted average put price | 40 | ||
Weighted average second put price | 50 | ||
Weighted average call price | 62.03 | ||
Oil | Three-way collars | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | $ | 66,061 | ||
Weighted average put price | 45 | ||
Weighted average second put price | 55 | ||
Weighted average call price | 80.05 | ||
Natural Gas | NYMEX Swaps | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 46,313 | ||
Weighted average swap price | $ / MMBTU | 2.51 | ||
Natural Gas | NYMEX Swaps | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 175,421 | ||
Weighted average swap price | $ / MMBTU | 2.40 | ||
Natural Gas | Waha basis swaps | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 505,024 | ||
Weighted average swap price | $ / MMBTU | 0.57 | ||
Number of derivative contracts | contract | 5 | ||
Natural Gas | Waha basis swaps | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 1,339,685 | ||
Weighted average swap price | $ / MMBTU | 0.55 | ||
Number of derivative contracts | contract | 2 | ||
Natural Gas | Two-way collars | Put | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 360,000 | 561,200 | |
Natural Gas | Two-way collars | Put | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 715,661 | ||
Weighted average put price | $ / MMBTU | 3.76 | ||
Natural Gas | Two-way collars | Put | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 2,486,514 | ||
Weighted average put price | $ / MMBTU | 3.18 | ||
Natural Gas | Two-way collars | Put | 2024 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 1,712,250 | ||
Weighted average put price | $ / MMBTU | 4 | ||
Natural Gas | Two-way collars | Call | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 180,000 | 280,600 | |
Natural Gas | Two-way collars | Call | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 435,061 | ||
Weighted average call price | $ / MMBTU | 10.22 | ||
Natural Gas | Two-way collars | Call | 2023 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 2,306,514 | ||
Weighted average call price | $ / MMBTU | 5.03 | ||
Natural Gas | Two-way collars | Call | 2024 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 1,712,250 | ||
Weighted average call price | $ / MMBTU | 6.29 | ||
Natural Gas | Three-way collars | 2022 | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Hedged volume | 304,250 | ||
Weighted average put price | $ / MMBTU | 2.20 | ||
Weighted average second put price | $ / MMBTU | 2.50 | ||
Weighted average call price | $ / MMBTU | 3.25 | ||
Weighted average deferred premium price | $ / MMBTU | 0.19 |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS - Additional information (Details) | Sep. 30, 2022 |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Percentage of Company's volumes subject to derivative instruments with lenders | 100% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | |
Fair Value Measurement Classification | ||
Commodity Derivatives - Assets | $ 24,867,995 | |
Commodity Derivatives - Liabilities | (32,502,077) | $ (29,241,588) |
Total | (7,634,082) | (29,241,588) |
Quoted prices in Active Markets for Identical Assets or (Liabilities) (Level 1) | Fair Value Measurement Classification | ||
Commodity Derivatives - Assets | 0 | |
Commodity Derivatives - Liabilities | 0 | 0 |
Total | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Fair Value Measurement Classification | ||
Commodity Derivatives - Assets | 24,867,995 | |
Commodity Derivatives - Liabilities | (32,502,077) | (29,241,588) |
Total | (7,634,082) | (29,241,588) |
Significant Unobservable Inputs (Level 3) | Fair Value Measurement Classification | ||
Commodity Derivatives - Assets | 0 | |
Commodity Derivatives - Liabilities | 0 | 0 |
Total | $ 0 | $ 0 |
REVOLVING LINE OF CREDIT (Detai
REVOLVING LINE OF CREDIT (Details) | 1 Months Ended | 9 Months Ended | |||
Aug. 31, 2022 USD ($) Lender | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 10, 2021 USD ($) bbl | Apr. 30, 2019 USD ($) | |
Line of Credit Facility | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 600,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | ||
Line of Credit Facility Current Borrowing Capacity | $ 600,000,000 | $ 350,000,000 | $ 350,000,000 | ||
Number of new lenders | Lender | 5 | ||||
Number of exiting lenders | Lender | 5 | ||||
Company required to maintaining rolling basis | 24 months | ||||
Minimum percentage of projected production to be hedged | 50% | ||||
Percentage of hedge testing | 0% | ||||
Long-term Line of Credit | $ 435,000,000 | $ 290,000,000 | |||
Minimum | |||||
Line of Credit Facility | |||||
Utilization of borrowing base rate | 25% | ||||
Leverage Ratio, Total | 1 | ||||
Current ratio | 1 | ||||
Minimum | Calendar Year 2022 | |||||
Line of Credit Facility | |||||
Number of barrels per day | bbl | 3,100 | ||||
Maximum | |||||
Line of Credit Facility | |||||
Percentage of hedge testing | 25% | ||||
Utilization of borrowing base rate | 25% | ||||
Leverage Ratio, Total | 1.25 | 3 | |||
Maximum | Calendar Year 2022 | |||||
Line of Credit Facility | |||||
Number of barrels per day | bbl | 4,000 | ||||
SOFR Loans | Adjusted term SOFR | Minimum | |||||
Line of Credit Facility | |||||
Interest rate basis percentage | 3% | ||||
SOFR Loans | Adjusted term SOFR | Maximum | |||||
Line of Credit Facility | |||||
Interest rate basis percentage | 4% | ||||
Base Rate Loans | |||||
Line of Credit Facility | |||||
Interest rate percentage | 0% | ||||
Base Rate Loans | Minimum | |||||
Line of Credit Facility | |||||
Interest rate margin percentage | 2% | ||||
Base Rate Loans | Maximum | |||||
Line of Credit Facility | |||||
Interest rate margin percentage | 3% | ||||
Base Rate Loans | Adjusted term SOFR | |||||
Line of Credit Facility | |||||
Interest rate basis percentage | 1% | ||||
Base Rate Loans | Federal Funds Rate | |||||
Line of Credit Facility | |||||
Interest rate basis percentage | 0.50% |
ASSET RETIREMENT OBLIGATION (De
ASSET RETIREMENT OBLIGATION (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
ASSET RETIREMENT OBLIGATION. | ||
Balance at the beginning | $ 15,292,054 | |
Liabilities incurred | 218,082 | |
Liabilities acquired | 14,538,550 | |
Liabilities sold | $ 2,934,126 | |
Revision of previous estimates | $ 153,475 | |
Liabilities settled | (1,239,634) | |
Accretion expense | 617,685 | |
Balance at the end | $ 29,426,737 |
STOCKHOLDERS EQUITY AND MEZZA_2
STOCKHOLDERS EQUITY AND MEZZANINE EQUITY - (Details) - USD ($) | 12 Months Ended | ||||||||||
Sep. 08, 2022 | Aug. 25, 2022 | Aug. 19, 2022 | Apr. 07, 2022 | Apr. 06, 2022 | Apr. 05, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Apr. 07, 2021 | Apr. 06, 2021 | Apr. 05, 2021 | |
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | |||||||||||
Proceeds from issuance of common stock gross | $ 367,509 | ||||||||||
Common warrants | |||||||||||
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | |||||||||||
Stock issued during period, shares, new issues | 442,600 | ||||||||||
Proceeds from issuance of common stock gross | $ 2,400,000 | $ 2,400,000 | $ 2,400,000 | $ 5,163,126 | $ 5,163,126 | $ 5,163,126 | |||||
Common warrants exercised | 3,000,000 | 3,000,000 | 3,000,000 | 6,453,907 | 6,453,907 | 6,453,907 | |||||
Exercise price | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | ||||
Class of Warrant or Right, Outstanding | 19,907,793 | ||||||||||
Pre-funded warrants | |||||||||||
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | |||||||||||
Stock issued during period, shares, new issues | 13,428,500 |
STOCKHOLDERS EQUITY AND MEZZA_3
STOCKHOLDERS EQUITY AND MEZZANINE EQUITY - Common Stock and Convertible Preferred Stock (Details) - $ / shares | 9 Months Ended | |||
Aug. 31, 2022 | Sep. 30, 2022 | Sep. 26, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | ||||
Common Stock, par value | $ 0.001 | $ 0.001 | ||
Common Stock | ||||
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | ||||
Aggregate Common stock shares to be issued for which Registration Statement has been filed | 42,548,892 | |||
Stronghold Acquisition | ||||
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | ||||
Stock issued | 21,339,986 | |||
As-Converted Shares of Ring Common Stock | 42,548,903 | |||
Stronghold Acquisition | Series A Convertible Preferred Stock | ||||
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | ||||
Stock issued | 153,176 | 153,176 | ||
Number of common stock shares that each preferred shares are convertible into | 277.7778 | |||
As-Converted Shares of Ring Common Stock | 42,548,892 | |||
Stronghold Acquisition | Common Stock | ||||
STOCKHOLDERS' EQUITY AND MEZZANINE EQUITY | ||||
Stock issued | 21,339,986 | 21,339,986 |
EMPLOYEE STOCK OPTIONS AND RE_3
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Status of the Stock Options (Details) - Stock options - USD ($) | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | ||||||
Options Outstanding at beginning of the period | 265,500 | 365,500 | 365,500 | 465,500 | 465,500 | 465,500 |
Granted | 0 | 0 | 0 | 0 | 0 | 0 |
Forfeited or rescinded | 0 | 0 | 0 | 0 | 0 | 0 |
Options Exercised | 0 | (100,000) | 0 | 0 | 0 | 0 |
Options Outstanding at end of period | 265,500 | 265,500 | 365,500 | 465,500 | 465,500 | 465,500 |
Options Exercisable at end of period | 265,500 | 458,300 | ||||
Weighted Average Exercise Price, Outstanding at beginning of the period | $ 4.21 | $ 3.61 | $ 3.61 | $ 3.26 | $ 3.26 | $ 3.26 |
Weighted Average Exercise Price, Exercised | 2 | |||||
Weighted Average Exercise Price, Outstanding at end of period | 4.21 | $ 4.21 | $ 3.61 | 3.26 | $ 3.26 | $ 3.26 |
Weighted Average Exercise Price, Exercisable at end of period | $ 4.21 | $ 3.13 | ||||
Options Outstanding - Weighted-Average Remaining Contractual Life (in years) | 1 year 10 months 20 days | 2 years 1 month 20 days | 2 years 2 months 15 days | 2 years 7 months 9 days | 2 years 9 months | 3 years |
Options Exercisable - Weighted-Average Remaining Contractual Life (in years) | 1 year 10 months 20 days | 2 years 6 months 25 days | ||||
Aggregate Intrinsic Value, Outstanding at beginning of the period | $ 128,700 | $ 536,900 | $ 426,300 | $ 134,850 | ||
Aggregate Intrinsic Value, Outstanding at end of period | $ 62,400 | $ 128,700 | $ 536,900 | $ 375,250 | $ 426,300 | $ 134,850 |
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 2.32 | $ 2.95 | ||||
Unrecognized compensation cost related to restricted stock | $ 0 |
EMPLOYEE STOCK OPTIONS AND RE_4
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Status of Restricted Stock Grants (Details) - Restricted Stock - USD ($) | 3 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | |||||||
Restricted stock, Outstanding at beginning of the period | 3,211,900 | 3,819,657 | 2,572,596 | 3,230,569 | 2,037,947 | 2,132,297 | |
Restricted stock, Granted | 341,155 | 126,570 | 19,642 | 1,247,061 | 29,554 | 1,196,102 | 0 |
Restricted stock, Forfeited or rescinded | 0 | (17,204) | 0 | 0 | 0 | 0 | |
Restricted stock, Vested | (9,851) | (610,195) | 0 | (12,500) | (3,480) | (94,350) | |
Restricted stock, Outstanding at end of period | 3,328,619 | 3,328,619 | 3,211,900 | 3,819,657 | 3,247,623 | 3,230,569 | 2,037,947 |
Weighted-Average Grant Date Fair Value, Outstanding at beginning of the period | $ 1.97 | $ 2.09 | $ 1.75 | $ 1.55 | $ 0.85 | $ 1.03 | |
Weighted-Average Grant Date Fair Value, Granted | 2.95 | 4.27 | 2.79 | 2.69 | 2.77 | 0 | |
Weighted-Average Grant Date Fair Value, Forfeited or rescinded | 0 | 2.79 | 0 | 0 | 0 | 0 | |
Weighted-Average Grant Date Fair Value, Vested | 2.69 | 2.80 | 0 | 2.15 | 5.96 | 4.95 | |
Weighted-Average Grant Date Fair Value, Outstanding at end of the period | $ 2 | $ 2 | $ 1.97 | $ 2.09 | $ 1.56 | $ 1.55 | $ 0.85 |
Unrecognized compensation cost related to restricted stock | $ 3,468,926 | $ 3,468,926 | |||||
Recognized over a weighted average period | 1 year 10 months 24 days |
EMPLOYEE STOCK OPTIONS AND RE_5
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Performance Stock Units (Details) - Performance Shares - USD ($) | 3 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Summary of the status of the performance stock grants | ||||
Restricted stock, Outstanding at beginning of the period | 1,720,432 | 1,720,432 | 860,216 | |
Restricted stock, Granted | 860,216 | |||
Restricted stock, Outstanding at end of period | 1,720,432 | 1,720,432 | 1,720,432 | 1,720,432 |
Weighted-Average Grant Date Fair Value, Outstanding at beginning of the period | $ 3.76 | $ 3.76 | $ 3.87 | |
Weighted-Average Grant Date Fair Value, Granted | 3.65 | |||
Weighted-Average Grant Date Fair Value, Outstanding at end of the period | $ 3.76 | $ 3.76 | $ 3.76 | $ 3.76 |
Unrecognized compensation cost related to PSU | $ 4,681,787 | |||
Recognized over a weighted average period | 1 year 9 months 14 days |
EMPLOYEE STOCK OPTIONS AND RE_6
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 | May 31, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2013 | Dec. 31, 2011 | |
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | ||||||||||||
Compensation Expenses Charged Against Income For Share Based Awards Included In General And Administrative Expenses | $ 1,543,033 | $ 777,461 | $ 4,964,188 | $ 1,484,730 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,500,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 5,000,000 | |||||||||||
2021 Plan | ||||||||||||
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 9,900,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 341,155 | |||||||||||
Number of shares granted | 5,577,843 | |||||||||||
Restricted Stock | ||||||||||||
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN | ||||||||||||
Number of shares granted | 341,155 | 126,570 | 19,642 | 1,247,061 | 29,554 | 1,196,102 | 0 |
CONTINGENCIES AND COMMITMENTS -
CONTINGENCIES AND COMMITMENTS - Additional Information (Details) - USD ($) | 9 Months Ended | |||||
Sep. 30, 2022 | Aug. 31, 2022 | May 19, 2020 | Apr. 30, 2019 | Apr. 09, 2019 | Jun. 26, 2015 | |
CONTINGENCIES AND COMMITMENTS | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 | $ 600,000,000 | $ 1,000,000,000 | |||
Issued surety bonds | 450,288 | |||||
Surety Bond | ||||||
CONTINGENCIES AND COMMITMENTS | ||||||
Issued surety bonds | 500,438 | |||||
Surety bonds renewal amount | 400,000 | |||||
Surety bonds renewal amount, not applicable | $ 100,438 | |||||
Extended Term For Surety Bonds | 1 year | |||||
Inactive Surety Bond | ||||||
CONTINGENCIES AND COMMITMENTS | ||||||
Issued surety bonds | $ 50,288 | |||||
Standby Letters of Credit | ||||||
CONTINGENCIES AND COMMITMENTS | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 250,000 | |||||
Issued surety bonds | $ 500,438 | $ 10,000 | ||||
Standby letters of credit drawn | $ 0 | |||||
Standby Letters of Credit | State And Federal Agencies | ||||||
CONTINGENCIES AND COMMITMENTS | ||||||
Extended term under letter of credit arrangement (in years) | 1 year |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | Oct. 27, 2022 | Oct. 13, 2022 | Oct. 01, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
SUBSEQUENT EVENTS | |||||
Stock par value | $ 0.001 | $ 0.001 | |||
Subsequent Events. | |||||
SUBSEQUENT EVENTS | |||||
Extend lease term | 5 years | ||||
Stock issued during period, shares, new issues | 63,888,878 | ||||
Subsequent Events. | Common Stock | |||||
SUBSEQUENT EVENTS | |||||
Stock issued during period, shares, new issues | 42,548,892 | 21,339,986 | |||
Subsequent Events. | Series A Convertible Preferred Stock | |||||
SUBSEQUENT EVENTS | |||||
Number of Preferred stock shares converted | 153,176 | ||||
Subsequent Events. | Convertible preferred stock | |||||
SUBSEQUENT EVENTS | |||||
Stock issued during period, shares, new issues | 42,548,892 |
ACQUISITIONS & DIVESTITURES - A
ACQUISITIONS & DIVESTITURES - Andrews County Divestiture (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
ACQUISITIONS & DIVESTITURES | ||
Net value consideration in cash received upon divestiture | $ 25,066 | $ 2,000,000 |
Reduction in asset retirement obligations for properties sold | 1,239,634 | |
Increase in asset retirement obligations for wells acquired | $ 218,082 |