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Organization and Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2011
Organization and Summary of Significant Accounting Policies |
Organization and Summary of Significant Accounting Policies | Note 1: Organization and Summary of Significant Accounting Policies Organization – Ring Energy, Inc., a development stage entity (the “Company”), was incorporated in the State of Nevada on July 30, 2004 as Blanca Corporation and subsequently changed its name to Transglobal Mining Corp. During March 2008, the name was changed to Ring Energy, Inc. Since its inception the Company has been engaged in various aspects of the extractive industry and currently holds a 25% non-operating working interest (18 ¾% net revenue interest) in an oil and gas lease comprising 440 total acres located in Howard County, Texas, known as the Anderson Prospect (the “Prospect”). One well was completed on the Prospect known as the Eastland #1 (the “Well”). The production of oil from the Well has consistently decreased which has resulted in an impairment of the cost of the Well and subsequently the entire Prospect. In September 2011, the Company entered into a non-binding letter of intent with stockholders owning a majority of the issued and outstanding common stock of Stanford Energy, Inc., a Texas corporation, (“Stanford”) whereby it was intended that the Company acquire all of the issued and outstanding shares of common stock of Stanford. In conjunction therewith the Company paid a $250,000 non-refundable transaction fee to Stanford. Subsequently the Company made advances to Stanford which, at December 31, 2011 amounted to $850,000. On January 30, 2012, the Company entered into an unsecured note receivable with Stanford in the amount of $1,006,978 which includes interest at 5% per annum from the time of each advance. Stanford is an oil and gas operator holding mineral leases in Andrews County, Texas. See Note 6 Subsequent Events. Cash and Cash Equivalents – The Company considers all highly liquid financial instruments with original maturities of three months or less to be cash equivalents. The carrying value approximates the fair value of these financial instruments. All cash deposits are held in one financial institution and amounts over $250,000 and are not federally insured. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Oil and Gas Properties – The Company utilizes the full cost method of accounting for oil and gas properties. Under this method all costs associated with acquisition, exploration, and development of oil and gas properties, including equipping of productive wells, are capitalized and are subject to depletion and/or impairment. The Company commenced the production of oil from the Well during 2009 and utilized the unit-of-production method to deplete a total of $3,125. In addition, during 2009 the Company impaired the Prospect in the amount of $270,262 and during 2010 the balance of the Company’s cost in the Prospects was impaired for an additional $22,655. In January 2011, the Company elected not to participate in the cost of the recompleting the Well and therefore may not receive any future benefit from the Well and possibly the Prospect. Depreciation – The Company maintains office furniture at its corporate office that is recorded at cost and depreciated using the straight-line method over a seven year period. Depreciation for the years ended December 31, 2011 and 2010 was $1,199 and $1,199, respectively, and accumulated depreciation was $3,796 and $2,597, respectively. Fair Value Accounting – The carrying amounts reported on the balance sheets for cash and cash equivalents, notes and interest receivable, deposits, prepaid expenses and all components of total current liabilities approximate fair value due to the immediate or short-term maturity of the instruments comprising these items. The Company utilized Level 1 inputs to value the aforementioned assets and liabilities at the balance sheet dates. Revenue Recognition – The Company derives its revenue from the sale of oil as a non-operator of the Prospect. Each month the Company estimates the amount of production that will be delivered to purchasers and the price per barrel that will be received. Variances between the Company’s estimated revenue and actual payment are recorded in the month the payment is received. If estimated production is not readily determinable, revenue will not be recorded until the Company receives payment. Net Loss per Common Share – The computation of net loss per common share is based on the weighted average number of shares outstanding during the periods presented. No potentially dilutive securities or derivative instruments are outstanding. Income Taxes – The Company follows the provisions of uncertain tax positions as addressed in FASB ASC 740-10-65-1 and uses the asset and liability method of accounting for income taxes. Under this method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets and liabilities and are measured using enacted tax rates to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. Tax years that remain subject to examination are years 2008 and forward.

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- Definition The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 22 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Name Statement of Position (SOP) -Publisher AICPA -Number 94-6 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Name FASB Interpretation (FIN) -Publisher FASB -Number 46R -Paragraph 4, 14, 15 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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