UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

  X .  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 2012

      .  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:  000-53920

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  X .  Yes

      .  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

  X .  Yes

      .  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer       .

Accelerated filer       .

Non-accelerated filer       .  

Smaller reporting company   X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Exchange Act).

      .  Yes

  X . No

The registrant has one class of common stock of which 6,643,328 shares were outstanding at May 10, 2012.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

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Item 1. Financial Statements

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

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Item 4. Controls and Procedures

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PART II – OTHER INFORMATION

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Item 1A. Risk Factors

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Item 6. Exhibits

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SIGNATURES

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

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Ring Energy, Inc.

(a development stage entity)

Notes to Unaudited Financial Statements

March 31, 2012

Note 1: Basis of Presentation

Interim Period - The accompanying unaudited interim financial statements of Ring Energy, Inc. (the “Company”) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Form 10-K report for the year ended December 31, 2011.

These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the three months ended March 31, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Development Stage Entity – The Company is considered a development stage entity because its principal oil and gas operations are minimal and have not produced any significant revenue. Total revenue of $16,744 has been recognized since commencement of oil production, but the cost of production and the associated depreciation, depletion and amortization has resulted in a net loss from oil and gas operations of $1,633. The Company is seeking to acquire additional oil and gas properties for development.

On March 1, 2012, the Company entered into a letter agreement (the "Agreement") with Patriot Royalty & Land, LLC ("Patriot Royalty") and paid $82,800 to purchase an interest in certain oil and gas leases. On May 3, 2012, the Company entered into a Stock-For-Stock Exchange Agreement with Stanford Energy, Inc., a Texas Corporation (“Stanford”), whereby the Company would acquire all of the issued and outstanding shares of Stanford in exchange for 3,440,000 shares of the Company’s common stock. In addition, the Company agreed to assume and adopt Stanford’s equity compensation plan and its outstanding options, which would represent the right to purchase up to 1,125,000 shares of the Company’s common stock.

Note 2: Summary of Significant Accounting Policies

Organization - The Company was incorporated in the State of Nevada on July 30, 2004 and currently has a working interest in non-producing oil and gas lease located in Howard and Andrews Counties, Texas, and is in the process of acquiring all of the issued and outstanding shares of Stanford.

Use of Estimates – The preparation of financial statements in conformity with GAAP 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.

Fair Value Accounting – The carrying value of certain of the Company’s financial instruments, including cash, cash equivalents, receivables from oil production sales, deposits, prepaid expenses, and current liabilities approximate fair value due to their short-term maturities. The Company utilized Level 1 inputs to value the aforementioned assets and liabilities at the balance sheet dates.

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 two financial institutions with amounts exceeding $250,000 not being federally insured.

Depreciation – The Company maintains office furniture that is recorded at cost and depreciated using the straight-line method over a seven year period. Accumulated depreciation of $4,096 and $3,796 was recorded at March 31, 2012 and December 31, 2011, respectively.

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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 the acquisition, exploration, and development of oil and gas properties, including equipping of productive wells, are capitalized and are subject to amortization and/or periodic impairment. The unit-of-production method was utilized to amortize the Company’s cost of its oil and gas properties subsequent to their initial impairment and until such time that the properties were fully impaired.

Net Loss per Common Share, basic and diluted - 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.

Note 3: Related Party Transactions

The Company’s 600 square foot executive office located in Redlands, California, is currently being leased on a month-to-month basis from a stockholder of the Company at a rate of $1,100 per month. A $1,000 deposit was paid at the commencement of the lease and at March 31, 2012 and December 31, 2011 the Company had prepaid one month of rent. Total rent expense paid for the three months March 31, 2012 and March 31, 2011 was $3,300 and $3,300, respectively.

Note 4: Subsequent Events

During April and May 2012 the Company issued 856,444 shares of common stock at a price of $4.25 per share and received gross proceeds of $3,639,887 cash.

On May 3, 2012, the Company entered into a Stock-For-Stock Exchange Agreement with Stanford and its stockholders to acquire all of the outstanding shares of Stanford in exchange for 3,440,000 shares of the Company’s common stock. In addition the Company agreed to assume and adopt Stanford's equity compensation plan and its outstanding options, which would represent the right to purchase up to 1,125,000 shares of the Company’s common stock.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets and statements of income.  This section should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011, and our interim financial statements and accompanying notes to these financial statements.

Forward-Looking Statements

The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information.  Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, and potential growth opportunities.  Our forward looking statements do not consider the effects of future legislation or regulations.  Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct.  Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report.  While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, changes in the general economic downturn; a further downturn in the securities markets; uncertainties associated with oil and gas exploration and development, and our ability to generate revenue.  Should our underlying assumptions prove incorrect or the consequences of the aforementioned risks worsen, actual results could differ materially from those expected.  We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

There may also be other risks and uncertainties that we are unable to predict at this time or that we do not now expect to have a material adverse impact on our business.

References made in this Item 2

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the company” and “our company” refer to Ring Energy, Inc., a Nevada corporation.

References made to our oil and gas operations are the results we obtained from oil derived from a well known as the Eastland #1, in which we own a 25% working interest (18¾% net revenue interest) and which is located on a 440 acre oil and gas prospect in Howard County, Texas.

Results of Operations--Three Months Ended March 31, 2012 compared to March 31, 2011

For the three months ended March 31, 2012, and for the three months ended March 31, 2011, our losses from operations were $81,625 and $24,732, respectively, and represent an increase of $56,893 or 230%.  The principal contributing item to this increased loss resulted from an increase in our legal and accounting expenses of $60,943 that resulted from our efforts to enter into a Stock for Stock Exchange Agreement (“Agreement”) with Stanford Energy, Inc. (“Stanford”). The Agreement is the result of a second non-binding Letter of Intent (“LOI”) that we entered into on February 6, 2012 with Stanford and two of its shareholders, L. Tim Rochford and Stanley McCabe, to acquire all of the outstanding shares of Stanford. We reported this event in a Form 8-K dated April 2, 2012. It is intended that the transaction will be closed by May 31, 2012. During the three months ended March 31, 2012 and 2011, our general and administrative costs were $81,625 and $26,756, respectively, and represent an increase of $54,869 or 205%. This increase resulted from the increase in legal and accounting fees we previously described.

During the three months ended March 31, 2012, and for the three months ended March 31, 2011, our results from oil and gas operations were $-0- and $2,024, respectively.  We did not engage in the production of any oil and gas during the first quarter of 2012. We anticipate receiving revenue from oil and gas operations if and when we close the Agreement. We have no assurance that the Agreement will be closed; however, it is our intention to make a best effort attempt to complete the Agreement and close the Agreement as soon as possible.

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During the three month period ended March 31, 2012, we accrued interest of $16,089 compared to $780 during the three month period ended March 31, 2011. Our increase in interest income resulted from two factors: 1) interest income generated from savings based upon our increased cash position resulting from the issuance of our common stock and 2) from three 5% notes receivable from Stanford (“Notes”). If we close on the Agreement, the interest income from these Notes will be eliminated as a result of the offset of our accounting consolidation with Stanford. Consequently, it is not anticipated that our interest income will continue into the future.

Liquidity and Capital Resources

At March 31, 2012, our current assets were comprised primarily of cash and cash equivalents in the amount of $8,014,452 and we maintained a deposit of $25,000 with the Texas Railroad Commission. At March 31, 2012, current assets had increased by $3,616,481compared to December 31, 2011. This increase resulted from the issuance of 1,071,180 shares of our common stock at $4.00 per share resulting in gross proceeds of $4,284,720. These shares were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(5) and/or Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering.

During April and May 2012 we issued 856,444 shares of our common stock at $4.25 per share resulting in gross proceeds of $3,639,887. These shares were also issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(5) and/or Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering. As a result, our cash position as of April 30, 2012 was in excess of $11,350,000.

Between December 31, 2011 and March 31, 2012, our accounts payable increased by $23,832. This increase was primarily attributable to amounts owed to Hansen, Barnett & Maxwell, P.C., certified public accountants, pursuant to the anticipated Form 8-K that we would be required to file with the SEC upon the closing of the LOI we entered into with Stanford. We engaged them to review the requirement for historical financial statements of Stanford that would be required in the Form 8-K following closing. On May 3, 2012, we entered into the Agreement as a result of the LOI and anticipate closing the Agreement by the end of May, 2012.

During the three months ended March 31, 2012, our revenue sources consisted primarily of interest income from our cash deposits from the funds generated from our equity offerings and from accrued interest due as a result of the Stanford Notes.  Until we close the transaction contemplated by the Agreement or we acquire other producing oil and gas properties, we do not anticipate receiving production payments from the oil and gas properties we currently hold.  We do anticipate receiving interest payments from our deposits of cash in a financial institution; however, such amounts will not be material to our operations and will continue to decrease as we use our cash deposits.

In connection with the LOI and Agreement with Stanford, we have paid to Stanford, and Stanford acknowledges receipt of, a non-refundable transaction fee in the amount of $250,000.  In addition, through the quarter ended March 31, 2012, we loaned a total of $1,375,000 to Stanford and have subsequently loaned an additional $125,000.  These advances are evidenced by promissory notes from Stanford.  The notes are due on or before January 31, 2013, and bear interest at the rate of 5% per annum from the date of each advance.

Subsequent to the quarter ended March 31, 2012, on May 3, 2012, we entered into the Stock-For-Stock Exchange Agreement with Stanford and its two shareholders to acquire all of the outstanding shares of Stanford in exchange for a total of 3,440,000 shares of our common stock.  In addition, we have agreed to assume and adopt Stanford’s equity compensation plan and its outstanding options to purchase 450 shares of Stanford, which at closing would represent the right to purchase up to 1,125,000 shares of our common stock.  Also at closing we have agreed to increase the number of directors to six persons and to appoint Messrs. Rochford and McCabe as directors of our company and to appoint William R. Broaddrick as our Treasurer and Controller. Closing is scheduled to be held on or before May 31, 2012, with an effective date of January 1, 2012. Stanford holds interests in oil and gas properties located in Andrews County, Texas.  The shares to be issued to the shareholders of Stanford will not be and have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

On April 11, 2012, we completed the purchase of an interest in oil and gas leases through the assignment of certain Oil, Gas and Mineral Leases located in Andrews County, Texas, and containing approximately 161.4 acres of land.  The assignment was from Patriot Royalty and Land, LLC for which we paid $100,368.  Our interest in the leases represents approximately an 89.5% leasehold interest.  There are no producing wells on these leases.  The parties amended the Agreement to allow a second closing date for up to 45 days from April 10, 2012, to permit Patriot Royalty the opportunity to secure an additional leasehold interest for which the Company would pay a proportional amount at the original purchase price of $700 per net mineral acre acquired by Patriot Royalty and assigned to the Company.  We anticipate that if Patriot Royalty is successful in securing an additional 8.5% net leasehold interest in the leases, the Company would pay approximately an additional $9,600 for this additional interest.

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Also, we have placed $82,800 in escrow for the purchase from Fisher Royalties of a working interest in approximately 280 acres located in Andrews County, Texas.  Closing of the transaction is subject to completion of satisfactory due diligence by the Company.

We have been accepted by the State of Texas to become an operator of oil and gas operations within that state.  

At March 31, 2012, we had approximately $8,014,452 million in cash with which to maintain ongoing operations and to engage in further oil and gas activities.  In addition, we hold an unsecured note receivable bearing interest at 5% per annum due on January 30, 2013, from Stanford Energy. At March 31, 2012 the amount we have loaned was $1,375,000 and we subsequently loaned an additional $125,000 for a total of $1,500,000.

To the extent possible, we intend to acquire producing properties and/or developed undrilled properties rather than exploratory properties.  We do not intend to limit our evaluation to any one state.  We presently have no intention to evaluate off-shore properties or properties located outside of the United States of America.

If our efforts to complete the transaction contemplated with Stanford are not successful, we intend to pursue the acquisition of additional oil and gas properties.  This pursuit may again require substantially greater capital than we currently have available and obtaining additional capital would require that we enter into the sale of either short-term or long-term notes payable or the sale of our common stock.  Furthermore, it may be necessary for us to retain outside consultants and others in our endeavors to locate desirable oil and gas properties.  The cost to retain one or more consultants or a firm specializing in the purchase/sale of oil and gas properties will have an impact on our financial position and will impact our future cash flows.

The process of acquiring one or more additional oil and gas properties will impact our financial position and reduce our cash position.  The types of costs that we may incur include travel cost relating to meeting with individuals instrumental in our acquisition of one or more oil and gas properties, obtaining petroleum engineer reports relative to the oil and gas properties that we are investigating, legal fees associated with such acquisition including title reports, and accounting fees relative to obtaining historical information regarding such oil and gas properties.  Even though we may incur such cost, there is no assurance that we will ultimately be able to consummate a transaction resulting in our acquisition of an oil and/or gas property.

Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements and it is not anticipated that the Company will enter into any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required by smaller reporting company.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Our management, with the participation of Robert “Steve” Owens, our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.  Based on that evaluation, Mr. Owens concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 

Changes in internal control over financial reporting

There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during our most recent fiscal quarter ended March 31, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1A. Risk Factors

We have made significant unsecured loans which if not paid upon maturity may have a material negative impact on our financial condition.

Through the quarter ended March 31, 2012, we loaned a total of $1,375,000 to Stanford Energy, Inc. and subsequently loaned an additional $125,000.  These loans are evidenced by unsecured promissory notes which are due on or before January 31, 2013.  The notes bear interest at the rate of 5% per annum from the date of each advance.  In the event that Stanford fails to repay these loans when due, we may be required to commence legal action for their collection.   Since the notes are not secured by the assets of Stanford, collection would be more difficult and could result in our inability to collect the full amount due.  This amount represents a significant amount of our total assets and the inability to collect this loan would have a material negative impact on our financial position and liquidity.

Item 6. Exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Ring Energy, Inc.

Date: May 11, 2012

By: /s/ Robert Steve Owens

Robert “Steve” Owens, President

(Principal Executive & Financial Officer)

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