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ACQUISITIONS AND DIVESTITURES | 3 Months Ended
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Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
ACQUISITIONS AND DIVESTITURES | NOTE 5 — ACQUISITIONS AND DIVESTITURES CBP Vertical Well Sale On September 30, 2024, the Company completed the sale of certain oil and gas properties, including vertical wells and associated facilities, within Andrews County, Texas and Gaines County, Texas to an unaffiliated party for $5.5 million, with cash consideration being the same. As part of the sale, the buyer assumed an asset retirement obligation balance of approximately $2.7 million. Lime Rock Acquisition On February 25, 2025, the Company, as buyer, and Lime Rock Resources IV-A, L.P. (“LRRA”) and Lime Rock Resources IV-C, L.P. ("LRRC" and with LRRA, "Lime Rock"), as seller, entered into a purchase and sale agreement (the “Purchase Agreement”). Pursuant to the closing of the Purchase Agreement, on March 31, 2025 the Company acquired (the “Lime Rock Acquisition”) interests in oil and gas leases and related property of Lime Rock located in the Central Basin Platform of the Texas Permian Basin in Andrews County, Texas, for a purchase price (the “Purchase Price”) of (i) a cash deposit of $5.0 million paid on February 26, 2025 into a third-party escrow account as a deposit pursuant to the Purchase Agreement, (ii) approximately $63.6 million in cash paid on the closing date, net of approximately $12.7 million of preliminary and customary purchase price adjustments and subject to final post-closing settlement between the Company and Lime Rock with an effective date of October 1, 2024, (iii) an aggregate of 6,452,879 shares of common stock and (iv) a deferred cash payment of $10.0 million to be paid by December 31, 2025. The Lime Rock Acquisition was accounted for as an asset acquisition in accordance with ASC 805. The fair value of the consideration paid by Ring and allocation to the underlying assets acquired, on a relative fair value basis, was recorded as of the date of the closing of the Lime Rock Acquisition. Additionally, costs directly related to the Lime Rock Acquisition were capitalized as a component of the purchase price. Determining the fair value of the assets and liabilities acquired required judgment and certain assumptions to be made, the most significant of these being related to the valuation of Lime Rock's oil and gas properties. The inputs and assumptions related to the oil and gas properties were categorized as level 3 in the fair value hierarchy. The following table represents the preliminary allocation of the total cost of the Lime Rock Acquisition to the assets acquired and liabilities assumed as of the Lime Rock Acquisition date:
Consideration: |  |
Common stock consideration |  |
Shares of common stock issued |  | 6,452,879 |
Common stock price as of March 31, 2025 |  | $ | 1.15 |
Total common stock consideration |  | $ | 7,420,811 |
Cash consideration |  |
Escrow deposit released at closing |  | $ | 5,000,000 |
Closing amount paid to Lime Rock |  | 63,599,939 |
Fair value of deferred payment liability |  | 9,415,066 |
Total cash consideration |  | $ | 78,015,005 |
Direct transaction costs |  | 2,294,105 |
Total consideration |  | $ | 87,729,921 |
Fair value of assets acquired: |  |
Oil and natural gas properties |  | $ | 90,844,802 |
Fixed assets |  | 34,275 |
Amount attributable to assets acquired |  | $ | 90,879,077 |
Fair value of liabilities assumed: |  |
Suspense liability |  | $ | 561,977 |
Asset retirement obligations |  | 2,587,179 |
Amount attributable to liabilities assumed |  | $ | 3,149,156 |
Net assets acquired |  | $ | 87,729,921 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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