Ring Energy (REI) 10-Q6 Nov 192019 Q3 Quarterly reportFinancial data

Company Profile

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2019	Nov. 06, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Registrant Name	RING ENERGY, INC.
Entity File Number	001-36057
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	90-0406406
Entity Address, Address Line One	901 West Wall St. 3rd Floor
Entity Address, City or Town	Midland
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	79701
City Area Code	(432)
Local Phone Number	682-7464
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	REI
Security Exchange Name	NYSE
Entity Central Index Key	0001384195
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		67,811,611
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Small Business	false

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current Assets
Cash	$ 7,599,089	$ 3,363,726
Accounts receivable	18,291,698	12,643,478
Joint interest billing receivable	2,025,180	578,144
Operating lease asset	169,115	0
Derivative asset	2,386,066	0
Prepaid expenses and retainers	3,340,178	258,909
Total Current Assets	33,811,326	16,844,257
Properties and Equipment
Oil and natural gas properties subject to depletion and amortization	1,059,284,347	641,121,398
Financing lease asset subject to depreciation	947,435	0
Fixed assets subject to depreciation	1,465,551	1,465,551
Total Properties and Equipment	1,061,697,333	642,586,949
Accumulated depreciation, depletion and amortization	(142,235,581)	(100,576,087)
Net Properties and Equipment	919,461,752	542,010,862
Derivative asset	680,847	0
Deferred Income Taxes	5,434,238	7,786,479
Deferred Financing Costs	3,403,491	424,061
Total Assets	962,791,654	567,065,659
Current Liabilities
Accounts payable	51,813,690	51,910,432
Financing lease liability	272,498	0
Operating lease liability	169,115	0
Total Current Liabilities	52,255,303	51,910,432
Revolving line of credit	366,500,000	39,500,000
Financing lease liability	588,251	0
Asset retirement obligations	16,703,186	13,055,797
Total Liabilities	436,046,740	104,466,229
Stockholders' Equity
Preferred stock - $0.001 par value; 50,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock - $0.001 par value; 150,000,000 shares authorized; 67,811,611 shares and 63,229,710 shares issued and outstanding, respectively	67,812	63,230
Additional paid-in capital	525,679,942	494,892,093
Accumulated earnings (deficit)	997,160	(32,355,893)
Total Stockholders' Equity	526,744,914	462,599,430
Total Liabilities and Stockholders' Equity	$ 962,791,654	$ 567,065,659

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
CONDENSED BALANCE SHEETS
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Shares, Issued	67,811,611	63,229,710
Common Stock, Shares, Outstanding	67,811,111	63,229,710

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
CONDENSED STATEMENTS OF OPERATIONS - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONDENSED STATEMENTS OF OPERATIONS
Oil and Gas Revenues	$ 50,339,105	$ 32,687,179	$ 143,471,645	$ 92,503,453
Costs and Operating Expenses
Oil and gas production costs	15,478,052	7,217,940	36,455,925	19,638,163
Oil and gas production taxes	2,307,226	1,551,097	6,802,996	4,405,974
Depreciation, depletion and amortization	14,115,170	10,930,563	41,659,494	28,576,057
Asset retirement obligation accretion	236,207	167,433	681,386	493,223
Operating lease expense	114,112	0	370,462	0
General and administrative expense	3,745,928	3,205,116	15,287,072	9,442,327
Total Costs and Operating Expenses	35,996,695	23,072,149	101,257,335	62,555,744
Income from Operations	14,342,410	9,615,030	42,214,310	29,947,709
Other Income (Expense)
Interest income	9	5,911	13,505	97,855
Interest expense	(4,556,509)	(40,944)	(9,589,434)	(85,427)
Realized loss on derivatives	0	(2,722,774)	0	(6,600,226)
Unrealized gain (loss) on change in fair value of derivatives	1,877,368	(566,649)	3,066,913	(2,456,623)
Net Other Income (Expense)	(2,679,132)	(3,324,456)	(6,509,016)	(9,044,421)
Income before Tax Provision	11,663,278	6,290,574	35,705,294	20,903,288
Provision for Income Taxes	(1,774,922)	(596,946)	(2,352,241)	(4,824,220)
Net Income	$ 9,888,356	$ 5,693,628	$ 33,353,053	$ 16,079,068
Basic Earnings per Share	$ 0.15	$ 0.09	$ 0.50	$ 0.27
Diluted Earnings per Share	$ 0.15	$ 0.09	$ 0.50	$ 0.27

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, 2017	$ 54,224	$ 397,904,769	$ (41,355,653)	$ 356,603,340
Balance (in shares) at Dec. 31, 2017	54,224,029
Share-based compensation	$ 0	1,081,199	0	1,081,199
Common stock issued for cash, net	$ 6,164	81,815,902	0	81,822,066
Common stock issued for cash, net (in shares)	6,164,000
Net income	$ 0	0	5,665,634	5,665,634
Balance at Mar. 31, 2018	$ 60,388	480,801,870	(35,690,019)	445,172,239
Balance (in shares) at Mar. 31, 2018	60,388,029
Balance at Dec. 31, 2017	$ 54,224	397,904,769	(41,355,653)	356,603,340
Balance (in shares) at Dec. 31, 2017	54,224,029
Net income				16,079,068
Balance at Sep. 30, 2018	$ 60,491	482,804,860	(25,276,585)	457,588,766
Balance (in shares) at Sep. 30, 2018	60,491,142
Balance at Mar. 31, 2018	$ 60,388	480,801,870	(35,690,019)	445,172,239
Balance (in shares) at Mar. 31, 2018	60,388,029
Share-based compensation	$ 0	1,002,348	0	1,002,348
Common stock issued for cash, net	0	(2,993)	0	(2,993)
Net income	0	0	4,719,806	4,719,806
Balance at Jun. 30, 2018	$ 60,388	481,801,225	(30,970,213)	450,891,400
Balance (in shares) at Jun. 30, 2018	60,388,029
Share-based compensation	$ 0	1,007,789	0	1,007,789
Options exercised (cashless exercise)	$ 103	(103)	0	0
Options exercised (cashless exercise) (in shares)	103,113
Common stock issued for cash, net	$ 0	(4,051)	0	(4,051)
Net income	0	0	5,693,628	5,693,628
Balance at Sep. 30, 2018	$ 60,491	482,804,860	(25,276,585)	457,588,766
Balance (in shares) at Sep. 30, 2018	60,491,142
Balance at Dec. 31, 2018	$ 63,230	494,892,093	(32,355,893)	462,599,430
Balance (in shares) at Dec. 31, 2018	63,229,710
Share-based compensation	$ 0	834,465	0	834,465
Net income	0	0	11,089,443	11,089,443
Balance at Mar. 31, 2019	$ 63,230	495,726,558	(21,266,450)	474,523,338
Balance (in shares) at Mar. 31, 2019	63,229,710
Balance at Dec. 31, 2018	$ 63,230	494,892,093	(32,355,893)	462,599,430
Balance (in shares) at Dec. 31, 2018	63,229,710
Net income				33,353,053
Balance at Sep. 30, 2019	$ 67,812	525,679,942	997,160	526,744,914
Balance (in shares) at Sep. 30, 2019	67,811,611
Balance at Mar. 31, 2019	$ 63,230	495,726,558	(21,266,450)	474,523,338
Balance (in shares) at Mar. 31, 2019	63,229,710
Common stock issued as consideration in asset acquisition	$ 4,581	28,351,815	0	28,356,396
Common stock issued as consideration in asset acquisition (in shares)	4,581,001
Share-based compensation	$ 0	808,734	0	808,734
Net income	0	0	12,375,254	12,375,254
Balance at Jun. 30, 2019	$ 67,811	524,887,107	(8,891,196)	516,063,722
Balance (in shares) at Jun. 30, 2019	67,811,111
Share-based compensation	$ 0	792,836	0	792,836
Net income	0	0	9,888,356	9,888,356
Balance at Sep. 30, 2019	$ 67,812	$ 525,679,942	$ 997,160	$ 526,744,914
Balance (in shares) at Sep. 30, 2019	67,811,611

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended		9 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Cash Flows From Operating Activities
Net income	$ 9,888,356	$ 5,693,628	$ 33,353,053	$ 16,079,068
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization			41,659,494	28,576,057
Accretion expense			681,386	493,223
Share-based compensation			2,436,035	3,091,336
Deferred income tax provision			7,498,112	4,389,690
Excess tax deficiency related to share-based compensation			(5,145,871)	434,530
Change in fair value of derivative instruments			(3,066,913)	2,456,623
Changes in assets and liabilities:
Accounts receivable			(7,095,256)	435,048
Prepaid expenses and retainers			(6,060,699)	(509,116)
Accounts payable			(1,055,397)	(2,989,645)
Settlement of asset retirement obligation			(615,732)	(452,468)
Net Cash Provided by Operating Activities			62,588,212	52,004,346
Cash Flows From Investing Activities
Payments to purchase oil and natural gas properties			(263,262,046)	(4,090,642)
Payments to develop oil and natural gas properties			(122,004,117)	(158,069,999)
Proceeds from disposal of fixed assets subject to depreciation			0	105,536
Net Cash Used in Investing Activities			(385,266,163)	(162,055,105)
Cash Flows From Financing Activities
Proceeds from revolving line of credit			327,000,000	17,000,000
Proceeds from issuance of common stock, net of offering costs			0	81,815,022
Reduction of financing lease liability			(86,686)	0
Net Cash Provided by Financing Activities			326,913,314	98,815,022
Net Change in Cash			4,235,363	(11,235,737)
Cash at Beginning of Period			3,363,726	15,006,581
Cash at End of Period	7,599,089	3,770,844	7,599,089	3,770,844
Supplemental Cash Flow Information
Cash paid for interest			5,821,545	54,652
Noncash Investing and Financing Activities
Asset retirement obligation incurred during development			602,090	1,058,763
Operating lease assets obtained in exchange for new operating lease liability			539,577	0
Financing lease assets obtained in exchange for new financing lease liability			947,435	0
Capitalized expenditures attributable to drilling projects financed through current liabilities			26,958,655	24,000,000
Acquisition of oil and gas properties
Assumption of joint interest billing receivable	1,464,394	0	1,464,394	0
Assumption of prepaid assets	2,864,554	0	2,864,554	0
Assumption of accounts and revenue payables	(1,234,862)	0	(1,234,862)	0
Asset retirement obligation incurred through acquisition	(2,979,645)	0	(2,979,645)	0
Common stock issued as partial consideration in asset acquisition	(28,356,396)	0	(28,356,396)	0
Oil and gas properties subject to amortization	$ 296,910,774	$ 0	$ 296,910,774	$ 0

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2019
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 Certain notes and other disclosures have been omitted from these interim financial statements. Therefore, these financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018. Organization and Nature of Operations – Use of Estimates Fair Measurements Fair Values of Financial Instruments Derivative Instruments and Hedging Activities When applicable, the Company records all derivative instruments, other than those that meet the normal purchases and sales exception, on the balance sheet 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. During the three and nine months ended During the three and nine months ended September 30, 2019, the Company had no realized gain or losses on derivatives. During the three and nine months ended September 30, 2018, the Company had realized losses on derivatives of $2,722,774 and $6,600,226, respectively. Concentration of Credit Risk and Major Customer Approximately 90% of the Company’s accounts and joint interest billing receivables are from purchasers of oil and gas. Oil and gas sales are generally unsecured. The Company has not had any significant credit losses in the past and believes its accounts and joint interest billing receivables are fully collectable. Accordingly, no allowance for doubtful accounts has been provided at September 30, 2019. The Company also has joint interest billing receivable. Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself. 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 independent petroleum engineers. The Company evaluates oil and gas properties for impairment at least annually. Depreciation, depletion and amortization expense for the three and nine months ended September 30, 2019, was $14,115,170 and $41,659,494, respectively, based on depletion at the rate of $13.42 and $14.18 per barrel of oil equivalent compared to $10,930,563 and $28,576,057, respectively, based on depletion at the rate of $18.10 and $17.32 per barrel of oil equivalent for the three and nine months ended September 30, 2018. These amounts include $110,120 and $217,551, respectively, of depreciation for the three and nine months ended September 30, 2019, compared to $42,418 and $171,604, respectively, of depreciation for the three and nine months ended September 30, 2018. Equipment, vehicles and leasehold improvements Asset Retirement Obligation Revenue Recognition Revenues from Contracts with Customers (Topic 606) Share-Based Employee Compensation Share-Based Compensation to Non-Employees Income Taxes In January 2017, the Company adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The SEC subsequently issued a Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”, which provides guidance on accounting for the tax effects of the Tax Act. Among other changes, the Tax Act lowered the corporate tax rate to 21%. Recently Adopted Accounting Pronouncements Leases In August 2017, the FASB issued ASU 2017-12 , Derivatives and Hedging (Topic 815), In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Recent Accounting Pronouncements Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). disclosure requirements for fair value measurement. ASU 2018-13 is effective for annual and interim periods beginning January 1, 2020, with early adoption permitted for either the entire standard or only the provisions that eliminate or modify requirements. ASU 2018-13 requires that the additional disclosure requirements be adopted using a retrospective approach. The Company is currently evaluating the provisions of ASU 2018-13 and assessing the impact it may have on its disclosures in the notes to the Company’s financial statements. Basic and Diluted Earnings per Share

REVENUE RECOGNITION

REVENUE RECOGNITION	9 Months Ended
REVENUE RECOGNITION	Sep. 30, 2019
REVENUE RECOGNITION
REVENUE RECOGNITION	NOTE 2 – REVENUE RECOGNITION 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 when control transfers to the purchaser at the point of delivery at the net price received. Natural gas sales Under the Company’s natural gas sales contracts, the Company delivers unprocessed natural gas to a midstream processing entity at the wellhead. The midstream processing entity obtains control of the natural gas at the wellhead. The midstream processing entity gathers and processes the natural gas and remits proceeds to the Company for the resulting sale of natural gas. Under these agreements, the Company recognizes revenue when control transfers to the purchaser at the point of delivery. Disaggregation of Revenue. For The Three Months For The Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Operating revenues Oil $ 49,502,656 $ 31,633,777 $ 141,174,111 $ 89,736,822 Natural gas 836,449 1,053,402 2,297,534 2,766,631 Total operating revenues $ 50,339,105 $ 32,687,179 $ 143,471,645 $ 92,503,453 All revenues are from production from the Permian Basin in Texas and New Mexico.

LEASES

LEASES	9 Months Ended
LEASES	Sep. 30, 2019
LEASES
LEASES	NOTE 3 – LEASES Effective January 1, 2019, the Company adopted ASU 2016-02, Leases The Company made accounting policy elections to not capitalize leases with a lease term of twelve months or less and to not separate lease and non-lease components for all asset classes. The Company has also elected to adopt the package of practical expedients within ASU 2016-02 that allows an entity to not reassess prior to the effective date (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) initial direct costs for any existing leases and the practical expedient regarding land easements that exist prior to the adoption of ASU 2016-02. The Company did not elect the practical expedient of hindsight when determining the lease term of existing contracts at the effective date. The Company has operating leases for our offices in Midland, Texas and Tulsa, Oklahoma with terms through January 31, 2020. The office space being leased in Tulsa is owned by Arenaco, LLC, a company that is owned by Mr. Rochford, Chairman of the Board of the Company, and Mr. McCabe, a Director of the Company. The Company has financing leases for vehicles. Future lease payments associated with these operating leases as of September 30, 2019 are as follows: 2019 2020 2021 2022 Operating lease payments (1) $ 128,175 $ 42,725 $ — $ — Financing lease payments (2) 77,802 311,206 311,206 132,499 (1) The weighted average discount rate as of September 30, 2019 for operating leases was 5.01%. Based on this rate, the future lease payments above include imputed interest of $1,785. (2) The weighted average discount rate as of September 30, 2019 for financing leases was 5.26%. Based on this rate, the future lease payments above include imputed interest of $71,116. The following table provides supplemental information regarding cash flows from operations: 2019 Operating lease costs $ 384,525 Short term lease costs (1) 461,277 Financing lease costs: Amortization of financing lease assets (2) 98,868 Interest on lease liabilities (3) 15,019 (1) Amount included in Oil and gas production costs (2) Amount included in Depreciation, depletion and amortization (3) Amount included in Interest expense

EARNINGS PER SHARE INFORMATION

EARNINGS PER SHARE INFORMATION	9 Months Ended
EARNINGS PER SHARE INFORMATION	Sep. 30, 2019
EARNINGS PER SHARE INFORMATION
EARNINGS PER SHARE INFORMATION	NOTE 4 – EARNINGS PER SHARE INFORMATION For The Three Months For The Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Net Income $ 9,888,356 $ 5,693,628 $ 33,353,053 $ 16,079,068 Basic Weighted-Average Shares Outstanding 67,811,127 60,405,355 66,149,469 59,084,300 Effect of dilutive securities: Stock options 25,841 1,346,133 204,639 1,416,434 Restricted stock — 78,893 47,314 66,498 Diluted Weighted-Average Shares Outstanding 67,836,968 61,830,381 66,401,422 60,567,232 Basic Earnings per Share $ 0.15 $ 0.09 $ 0.50 $ 0.27 Diluted Earnings per Share $ 0.15 $ 0.09 $ 0.50 $ 0.27 Stock options to purchase 2,353,500 shares of common stock and 3,250,420 shares of unvested restricted stock were excluded from the computation of diluted earnings per share during the three months ended September 30, 2019, as their effect would have been anti-dilutive. Stock options to purchase 2,353,500 shares of common stock and 2,639,540 shares of unvested restricted stock were excluded from the computation of diluted earnings per share during the nine months ended September 30, 2019, as their effect would have been anti-dilutive. Stock options to purchase 583,500 and 573,500 shares, respectively, of common stock were excluded from the computation of diluted earnings per share during the three and nine months ended September 30, 2018, as their effect would have been anti-dilutive.

ACQUISITIONS

ACQUISITIONS	9 Months Ended
ACQUISITIONS	Sep. 30, 2019
ACQUISITIONS.
ACQUISITIONS	NOTE 5 – ACQUISITIONS On April 9, 2019, the Company completed the acquisition of oil and gas properties from Wishbone Energy Partners, LLC, Wishbone Texas Operating Company LLC and WB WaterWorks LLC on the Northwest Shelf in Gaines, Yoakum, Runnels and Coke Counties, Texas and Lea County, New Mexico (the “Acquisition”). The acquired properties consist of 49,754 gross (38,230 net) acres and include a 77% average working interest and a 58% average net revenue interest. The Company incurred approximately $4.1 million in acquisition related costs, which were recognized in general and administrative expense during the nine months ended September 30, 2019. Total consideration after purchase price adjustments included a cash payment of approximately $264.1 million and the issuance of 4,581,001 shares of common stock, of which 2,538,071 shares are being held in escrow to satisfy potential indemnification claims. The full amount of the shares placed into escrow remain in escrow as of September 30, 2019. The escrow shares will be released pursuant to the terms of the Purchase and Sale Agreement. The shares were valued at the price on the date of the signing of the Purchase and Sale Agreement, February 25, 2019, of $6.19 per share. The Acquisition was recognized as a business combination whereby Ring recorded the assets acquired and the liabilities assumed at their fair values as of February 1, 2019, which is the date the Company obtained control of the properties and was the acquisition date for financial reporting purposes. Revenues and related expenses for the Acquisition are included in our condensed statement of operations beginning February 1, 2019. The estimated fair value of the acquired properties approximated the consideration paid, which the Company concluded approximated the fair value that would be paid by a typical market participant. The following table summarizes the fair values of the assets acquired and the liabilities assumed: Assets acquired: Proved oil and gas properties $ 296,910,774 Joint interest billing receivable 1,464,394 Prepaid assets 2,864,554 Liabilities assumed Accounts and revenues payable (1,234,862) Asset retirement obligations (2,979,645) Total Identifiable Net Assets $ 297,025,215 The Company will continue to evaluate the fair value of the assets and liabilities reflected above and will record any adjustments, if needed, in future periods. The following unaudited pro forma information for the three and nine months ended September 30, 2019 and 2018, respectively, is presented to reflect the operations of the Company as if the acquisition of assets had been completed on January 1, 2019 and 2018, respectively: For The Three Months For The Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Oil and Gas Revenues $ 57,004,519 $ 51,167,164 $ 150,137,059 $ 142,417,436 Net Income $ 9,948,798 $ 14,004,402 $ 33,413,495 $ 38,125,515 Basic Earnings per Share $ 0.15 $ 0.23 $ 0.49 $ 0.63 Diluted Earnings per Share $ 0.15 $ 0.22 $ 0.49 $ 0.61

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS	9 Months Ended
DERIVATIVE FINANCIAL INSTRUMENTS	Sep. 30, 2019
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 can utilize 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. During March and April 2019, the Company entered into new derivative contracts in the form of costless collars of WTI Crude Oil prices in order to protect the Company’s cash flow from price fluctuation and maintain its capital programs. “Costless collars” are the combination of two options, a put option (floor) and a call option (ceiling) with the options structured so that the premium paid for the put option will be offset by the premium received from selling the call option. The trades were for a total of 5,500 barrels of oil per day for the period of April 2019 through December 2019 and 2,000 barrels of oil per day for the period of January 2020 through December 2020. The following table reflects the put and call prices of those contracts: Date entered into Barrels per day Put price Call price 2019 contracts 03/12/19 1,500 $ 50.00 $ 66.00 03/13/19 500 50.00 67.40 03/20/19 500 50.00 67.90 03/20/19 1,000 50.00 68.71 04/01/19 1,000 50.00 69.50 04/03/19 1,000 50.00 70.20 2020 contracts 04/01/19 1,000 50.00 65.83 04/01/19 1,000 50.00 65.40 On September 25, 2017, the Company entered into derivative contracts in the form of costless collars for the period of January 2018 through December 2018 for 1,000 barrels per day with a put price of $49.00 and a call price of $54.60. On October 27, 2017, the Company entered into costless collars of WTI Crude Oil for the period of January 2018 through December 2018 for an additional 1,000 barrels of oil per day with a put price of $51.00 and a call price of $54.80. On August 27, 2018, the Company entered into additional costless collars of WTI Crude Oil. This trade is for the period January 1, 2019 through December 31, 2019 for 2,000 barrels of oil per day with a put price of $60.00 and a call price of $70.05. Subsequent to September 30, 2018, the Company terminated all of the costless collars for calendar year 2019 described above through the payment of $3,438,300. Derivative financial instruments are recorded at fair value and included as either assets or liabilities in the accompanying balance sheets. 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 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, 2019, 100% of our volumes subject to derivative instruments are with lenders under our Credit Facility (as defined in Note 8).

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
FAIR VALUE MEASUREMENTS	Sep. 30, 2019
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. We consider 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 we value using observable market data. Substantially all of these 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. Our 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. We continue to evaluate our inputs to ensure the fair value level classification is appropriate. When transfers between levels occur, it is our 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. The following table summarizes the valuation of our assets and liabilities that are measured at fair value on a recurring basis. Fair Value Measurement Classification Quoted prices in Actives Markets for Identical Assets Significant Other Significant or (Liabilities) Observable Inputs Unobservable (Level 1) (Level 2) Inputs (Level 3) Total As of September 30, 2019 Oil and gas derivative contracts $ — $ 3,066,913 $ — $ 3,066,913 Total $ — $ 3,066,913 $ — $ 3,066,913

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT	9 Months Ended
REVOLVING LINE OF CREDIT	Sep. 30, 2019
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT	NOTE 8 – REVOLVING LINE OF CREDIT On July 1, 2014, the Company entered into a Credit Agreement with SunTrust Bank, as lender, issuing bank and administrative agent for several banks and other financial institutions and lenders (the “Administrative Agent”), which was amended on June 14, 2018, May 18, 2016, July 24, 2015, and June 26, 2015. 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, increases the maximum borrowing amount to $1 billion, increases the borrowing base (the “Borrowing Base”) to $425 million, extends the maturity date through April 2024 and makes other modifications to the terms of the Credit Facility. 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 will be redetermined semi-annually on each May 1 and November 1. The Borrowing Base will also be reduced in certain circumstances such as the sale or disposition of certain oil and gas properties of the Company or its subsidiaries and cancellation of certain hedging positions. The Credit Facility allows for Eurodollar Loans and Base Rate Loans. The interest rate on each Eurodollar Loan will be the adjusted LIBOR for the applicable interest period plus a margin between 1.75% and 2.75% (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 Credit Facility) plus 0.5% per annum, the (iii) adjusted LIBOR 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 0.75% and 1.75% (depending on the then-current level of Borrowing Base usage). The Credit Facility contains certain covenants, which, among other things, require the maintenance of (i) a total Leverage Ratio (as defined in the Credit Facility) of not more than 4.0 to 1.0 and (ii) a minimum current ratio of Current Assets to Current Liabilities (as such terms are defined in the Credit Facility) of 1.0 to 1.0. The Credit Facility also contains other customary affirmative and negative covenants and events of default. As of September 30, 2019, $366,500,000 was outstanding on the Credit Facility. We are in compliance with all covenants contained in the Credit Facility.

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION	9 Months Ended
ASSET RETIREMENT OBLIGATION	Sep. 30, 2019
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION	NOTE 9 – ASSET RETIREMENT OBLIGATION The Company provides for 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 estimated cash flows. The asset retirement obligation incurred at the time of drilling was computed using the annual credit-adjusted risk-free discount rate at the applicable dates. Changes in the asset retirement obligation were as follows: Balance, December 31, 2018 $ 13,055,797 Liabilities acquired 2,979,645 Liabilities incurred 602,090 Liabilities settled (615,732) Accretion expense 681,386 Balance, September 30, 2019 $ 16,703,186

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
STOCKHOLDERS' EQUITY	Sep. 30, 2019
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 10 – STOCKHOLDERS’ EQUITY Common Stock Issued in Public Offering In February 2018, the Company closed on an underwritten public offering of 6,164,000 shares of its common stock, including 804,000 shares sold pursuant to the full exercise of an over-allotment option, at $14.00 per share for gross proceeds of $86,296,000. Total net proceeds from the offering were $81,819,073, after deducting underwriting commissions and offering expenses payable by the Company of $4,476,927. Common Stock Issued in Option Exercise – Exercise Shares Shares Stock price on Aggregate value of Options exercised price ($) issued retained date of exercise ($) shares retained ($) 25,000 7.50 9,829 15,171 12.36 187,500 3,000 8.00 1,059 1,941 12.36 24,000 3,000 5.25 1,750 1,250 12.36 15,750 2,000 11.75 100 1,900 12.36 23,500 110,000 2.00 90,375 19,625 11.21 220,000 Totals 143,000 103,113 39,887 470,750 Average 3.29 11.80

EMPLOYEE STOCK OPTIONS AND REST

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN	9 Months Ended
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN	Sep. 30, 2019
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, 2019, was $792,836 and $2,436,035, respectively, as compared to $1,007,789 and $3,091,336, respectively, for the three and nine months ended September 30, 2018. These amounts are included in general and administrative expense in the accompanying financial statements. In 2011, the 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. As of September 30, 2019, there were 665,160 shares remaining eligible for issuance under the plan. Stock Options A summary of the stock option activity as of September 30, 2019, and changes during the nine months then ended is as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2017 3,193,000 $ 6.07 Granted — $ — Forfeited or rescinded (24,500) $ 11.39 Exercised (143,000) $ 3.29 Outstanding, September 30, 2018 3,025,500 $ 6.15 5.3 Years $ 12,470,645 Exercisable, September 30, 2018 2,265,400 $ 4.92 4.6 Years Outstanding, December 31, 2018 2,751,000 $ 6.28 Granted — $ — Forfeited or rescinded (2,500) $ 11.70 Vested — $ — Outstanding, September 30, 2019 2,748,500 $ 6.28 4.2 Years $ — Exercisable, September 30, 2019 2,329,400 $ 5.43 3.7 Years The intrinsic value was calculated using the closing price on September 30, 2018 and 2019 of $9.91 and $1.64, respectively. As of September 30, 2019, there was $919,908 of unrecognized compensation cost related to stock options that is expected be recognized over a weighted-average period of 1.6 years. Restricted Stock A summary of the restricted stock activity as of September 30, 2019, and changes during the nine months then ended is as follows: Weighted- Average Grant Restricted stock Date Fair Value Outstanding, December 31, 2017 330,900 $ 13.44 Granted 4,500 11.40 Forfeited or rescinded (4,000) 13.44 Vested — — Outstanding, September 30, 2018 331,400 $ 13.41 Outstanding, December 31, 2018 878,360 $ 7.36 Granted 20,400 4.59 Forfeited or rescinded (5,940) 6.88 Vested (900) 11.40 Outstanding, September 30, 2019 891,920 $ 7.30 As of September 30, 2019, there was $3,451,385 of unrecognized compensation cost related to restricted stock grants that will be recognized over a weighted average period of 1.1 years.

CONTINGENCIES AND COMMITMENTS

CONTINGENCIES AND COMMITMENTS	9 Months Ended
CONTINGENCIES AND COMMITMENTS	Sep. 30, 2019
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS	NOTE 12 – CONTINGENCIES AND COMMITMENTS Standby Letters of Credit Surety Bonds

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2019
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 13 – SUBSEQUENT EVENTS The Company has evaluated subsequent events from September 30, 2019, through the date of filing this Form 10-Q and determined there are no other items to disclose.

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2019
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Condensed Financial Statements	Condensed Financial Statements Certain notes and other disclosures have been omitted from these interim financial statements. Therefore, these financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018.
Organization and Nature of Operations	Organization and Nature of Operations –
Use of Estimates	Use of Estimates
Fair Measurements	Fair Measurements
Fair Values of Financial Instruments	Fair Values of Financial Instruments
Derivative Instruments and Hedging Activities	Derivative Instruments and Hedging Activities When applicable, the Company records all derivative instruments, other than those that meet the normal purchases and sales exception, on the balance sheet 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. During the three and nine months ended During the three and nine months ended September 30, 2019, the Company had no realized gain or losses on derivatives. During the three and nine months ended September 30, 2018, the Company had realized losses on derivatives of $2,722,774 and $6,600,226, respectively.
Concentration of Credit Risk and Major Customer	Concentration of Credit Risk and Major Customer Approximately 90% of the Company’s accounts and joint interest billing receivables are from purchasers of oil and gas. Oil and gas sales are generally unsecured. The Company has not had any significant credit losses in the past and believes its accounts and joint interest billing receivables are fully collectable. Accordingly, no allowance for doubtful accounts has been provided at September 30, 2019. The Company also has joint interest billing receivable. Joint interest billing receivables are collateralized by the pro rata revenue attributable to the joint interest holders and further by the interest itself.
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 independent petroleum engineers. The Company evaluates oil and gas properties for impairment at least annually. Depreciation, depletion and amortization expense for the three and nine months ended September 30, 2019, was $14,115,170 and $41,659,494, respectively, based on depletion at the rate of $13.42 and $14.18 per barrel of oil equivalent compared to $10,930,563 and $28,576,057, respectively, based on depletion at the rate of $18.10 and $17.32 per barrel of oil equivalent for the three and nine months ended September 30, 2018. These amounts include $110,120 and $217,551, respectively, of depreciation for the three and nine months ended September 30, 2019, compared to $42,418 and $171,604, respectively, of depreciation for the three and nine months ended September 30, 2018.
Equipment, vehicles and leasehold improvements	Equipment, vehicles and leasehold improvements
Asset Retirement Obligation	Asset Retirement Obligation
Revenue Recognition	Revenue Recognition Revenues from Contracts with Customers (Topic 606)
Share-Based Employee Compensation	Share-Based Employee Compensation
Share-Based Compensation to Non-Employees	Share-Based Compensation to Non-Employees
Income Taxes	Income Taxes In January 2017, the Company adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718) On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The SEC subsequently issued a Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”, which provides guidance on accounting for the tax effects of the Tax Act. Among other changes, the Tax Act lowered the corporate tax rate to 21%.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements Leases In August 2017, the FASB issued ASU 2017-12 , Derivatives and Hedging (Topic 815), In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Recent Accounting Pronouncements Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). disclosure requirements for fair value measurement. ASU 2018-13 is effective for annual and interim periods beginning January 1, 2020, with early adoption permitted for either the entire standard or only the provisions that eliminate or modify requirements. ASU 2018-13 requires that the additional disclosure requirements be adopted using a retrospective approach. The Company is currently evaluating the provisions of ASU 2018-13 and assessing the impact it may have on its disclosures in the notes to the Company’s financial statements.
Basic and Diluted Earnings (Loss) per Share	Basic and Diluted Earnings per Share

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	9 Months Ended
REVENUE RECOGNITION (Tables)	Sep. 30, 2019
REVENUE RECOGNITION
Schedule of revenues disaggregated by product	For The Three Months For The Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Operating revenues Oil $ 49,502,656 $ 31,633,777 $ 141,174,111 $ 89,736,822 Natural gas 836,449 1,053,402 2,297,534 2,766,631 Total operating revenues $ 50,339,105 $ 32,687,179 $ 143,471,645 $ 92,503,453

LEASES (Tables)

LEASES (Tables)	9 Months Ended
LEASES (Tables)	Sep. 30, 2019
LEASES
Schedule of future lease payments of operating lease and finance lease	2019 2020 2021 2022 Operating lease payments (1) $ 128,175 $ 42,725 $ — $ — Financing lease payments (2) 77,802 311,206 311,206 132,499 (1) The weighted average discount rate as of September 30, 2019 for operating leases was 5.01%. Based on this rate, the future lease payments above include imputed interest of $1,785. (2) The weighted average discount rate as of September 30, 2019 for financing leases was 5.26%. Based on this rate, the future lease payments above include imputed interest of $71,116.
Schedule of lease cost	2019 Operating lease costs $ 384,525 Short term lease costs (1) 461,277 Financing lease costs: Amortization of financing lease assets (2) 98,868 Interest on lease liabilities (3) 15,019 (1) Amount included in Oil and gas production costs (2) Amount included in Depreciation, depletion and amortization (3) Amount included in Interest expense

EARNINGS PER SHARE INFORMATION

EARNINGS PER SHARE INFORMATION (Tables)	9 Months Ended
EARNINGS PER SHARE INFORMATION (Tables)	Sep. 30, 2019
EARNINGS 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, 2019 2018 2019 2018 Net Income $ 9,888,356 $ 5,693,628 $ 33,353,053 $ 16,079,068 Basic Weighted-Average Shares Outstanding 67,811,127 60,405,355 66,149,469 59,084,300 Effect of dilutive securities: Stock options 25,841 1,346,133 204,639 1,416,434 Restricted stock — 78,893 47,314 66,498 Diluted Weighted-Average Shares Outstanding 67,836,968 61,830,381 66,401,422 60,567,232 Basic Earnings per Share $ 0.15 $ 0.09 $ 0.50 $ 0.27 Diluted Earnings per Share $ 0.15 $ 0.09 $ 0.50 $ 0.27

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)	9 Months Ended
ACQUISITIONS (Tables)	Sep. 30, 2019
ACQUISITIONS.
Schedule of fair values of the assets acquired and the liabilities assumed	Assets acquired: Proved oil and gas properties $ 296,910,774 Joint interest billing receivable 1,464,394 Prepaid assets 2,864,554 Liabilities assumed Accounts and revenues payable (1,234,862) Asset retirement obligations (2,979,645) Total Identifiable Net Assets $ 297,025,215
Schedule of business acquisition pro forma information	For The Three Months For The Nine Months Ended September 30, Ended September 30, 2019 2018 2019 2018 Oil and Gas Revenues $ 57,004,519 $ 51,167,164 $ 150,137,059 $ 142,417,436 Net Income $ 9,948,798 $ 14,004,402 $ 33,413,495 $ 38,125,515 Basic Earnings per Share $ 0.15 $ 0.23 $ 0.49 $ 0.63 Diluted Earnings per Share $ 0.15 $ 0.22 $ 0.49 $ 0.61

DERIVATIVE FINANCIAL INSTRUME_2

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)	9 Months Ended
DERIVATIVE FINANCIAL INSTRUMENTS (Tables)	Sep. 30, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Schedule of put and call prices of those contracts	Date entered into Barrels per day Put price Call price 2019 contracts 03/12/19 1,500 $ 50.00 $ 66.00 03/13/19 500 50.00 67.40 03/20/19 500 50.00 67.90 03/20/19 1,000 50.00 68.71 04/01/19 1,000 50.00 69.50 04/03/19 1,000 50.00 70.20 2020 contracts 04/01/19 1,000 50.00 65.83 04/01/19 1,000 50.00 65.40

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
FAIR VALUE MEASUREMENTS (Tables)	Sep. 30, 2019
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 Actives Markets for Identical Assets Significant Other Significant or (Liabilities) Observable Inputs Unobservable (Level 1) (Level 2) Inputs (Level 3) Total As of September 30, 2019 Oil and gas derivative contracts $ — $ 3,066,913 $ — $ 3,066,913 Total $ — $ 3,066,913 $ — $ 3,066,913

ASSET RETIREMENT OBLIGATION (Ta

ASSET RETIREMENT OBLIGATION (Tables)	9 Months Ended
ASSET RETIREMENT OBLIGATION (Tables)	Sep. 30, 2019
ASSET RETIREMENT OBLIGATION
Schedule of asset retirement obligation	Balance, December 31, 2018 $ 13,055,797 Liabilities acquired 2,979,645 Liabilities incurred 602,090 Liabilities settled (615,732) Accretion expense 681,386 Balance, September 30, 2019 $ 16,703,186

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
STOCKHOLDERS' EQUITY (Tables)	Sep. 30, 2019
STOCKHOLDERS' EQUITY
Schedule of common stock issued in option exercise	The following table presents the details of those exercises: Exercise Shares Shares Stock price on Aggregate value of Options exercised price ($) issued retained date of exercise ($) shares retained ($) 25,000 7.50 9,829 15,171 12.36 187,500 3,000 8.00 1,059 1,941 12.36 24,000 3,000 5.25 1,750 1,250 12.36 15,750 2,000 11.75 100 1,900 12.36 23,500 110,000 2.00 90,375 19,625 11.21 220,000 Totals 143,000 103,113 39,887 470,750 Average 3.29 11.80

EMPLOYEE STOCK OPTIONS AND RE_2

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN (Tables)	9 Months Ended
	Sep. 30, 2019
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN
Summary of the stock option activity	Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2017 3,193,000 $ 6.07 Granted — $ — Forfeited or rescinded (24,500) $ 11.39 Exercised (143,000) $ 3.29 Outstanding, September 30, 2018 3,025,500 $ 6.15 5.3 Years $ 12,470,645 Exercisable, September 30, 2018 2,265,400 $ 4.92 4.6 Years Outstanding, December 31, 2018 2,751,000 $ 6.28 Granted — $ — Forfeited or rescinded (2,500) $ 11.70 Vested — $ — Outstanding, September 30, 2019 2,748,500 $ 6.28 4.2 Years $ — Exercisable, September 30, 2019 2,329,400 $ 5.43 3.7 Years
Summary of the restricted stock activity	Weighted- Average Grant Restricted stock Date Fair Value Outstanding, December 31, 2017 330,900 $ 13.44 Granted 4,500 11.40 Forfeited or rescinded (4,000) 13.44 Vested — — Outstanding, September 30, 2018 331,400 $ 13.41 Outstanding, December 31, 2018 878,360 $ 7.36 Granted 20,400 4.59 Forfeited or rescinded (5,940) 6.88 Vested (900) 11.40 Outstanding, September 30, 2019 891,920 $ 7.30

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019
Organization And Summary Of Significant Accounting Policies [Line Items]
Unrealized gain (loss) on change in fair value of derivatives	$ 1,877,368	$ (566,649)	$ 3,066,913	$ (2,456,623)
Realized loss on derivatives	$ 0	2,722,774	$ 0	6,600,226
Percentage of accounts and joint interest billing receivables	90.00%		90.00%
Amortization expense	$ 14,115,170	10,930,563	$ 41,659,494	28,576,057
Depletion At The Rate Per Barrel	13.42	18.10	14.18	17.32
Depreciation	110,120	42,418	217,551	171,604
Adjustment to deferred tax asset for change in effective tax rate	$ (673,971)	$ (724,073)	$ (5,145,871)	$ 434,530
Effective tax rate			21.00%
Accounting Standards Update 2016-02
Organization And Summary Of Significant Accounting Policies [Line Items]
Operating lease, term					12 months
Maximum
Organization And Summary Of Significant Accounting Policies [Line Items]
Useful life			7 years
Minimum
Organization And Summary Of Significant Accounting Policies [Line Items]
Useful life			5 years
Sales Revenue, Net \| Customer One
Organization And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration risk			39.00%
Sales Revenue, Net \| Customer Two
Organization And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration risk			38.00%
Accounts Receivable \| Customer One
Organization And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration risk			41.00%
Accounts Receivable \| Customer Two
Organization And Summary Of Significant Accounting Policies [Line Items]
Percentage of concentration risk			34.00%

REVENUE RECOGNITION (Details)

REVENUE RECOGNITION (Details) - USD ($)	3 Months Ended		9 Months Ended
REVENUE RECOGNITION (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
REVENUE RECOGNITION
Oil	$ 49,502,656	$ 31,633,777	$ 141,174,111	$ 89,736,822
Natural gas	836,449	1,053,402	2,297,534	2,766,631
Total operating revenues	$ 50,339,105	$ 32,687,179	$ 143,471,645	$ 92,503,453

LEASES (Details)

LEASES (Details)	9 Months Ended
LEASES (Details)	Sep. 30, 2019USD ($)
Operating lease payments
2019	$ 128,175
2020	$ 42,725
Weighted average discount rate	5.01%
Imputed interest	$ 1,785
Financing lease payments
2019	77,802
2020	311,206
2021	311,206
2022	$ 132,499
Weighted average discount rate	5.26%
Imputed interest	$ 71,116

LEASES - Supplemental informati

LEASES - Supplemental information regarding cash flows from operations (Details)	9 Months Ended
	Sep. 30, 2019USD ($)
LEASES
Operating lease costs	$ 384,525
Short term lease costs	461,277
Financing lease costs:
Amortization of financing lease assets	98,868
Interest on lease liabilities	$ 15,019

EARNINGS PER SHARE INFORMATIO_2

EARNINGS PER SHARE INFORMATION (Details) - USD ($)	3 Months Ended						9 Months Ended
EARNINGS PER SHARE INFORMATION (Details) - USD ($)	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
EARNINGS PER SHARE INFORMATION, BASIC and DILUTED
Net Income	$ 9,888,356	$ 12,375,254	$ 11,089,443	$ 5,693,628	$ 4,719,806	$ 5,665,634	$ 33,353,053	$ 16,079,068
Basic Weighted-Average Shares Outstanding	67,811,127			60,405,355			66,149,469	59,084,300
Effect of dilutive securities:
Diluted Weighted-Average Shares Outstanding	67,836,968			61,830,381			66,401,422	60,567,232
Basic Earnings per Share	$ 0.15			$ 0.09			$ 0.50	$ 0.27
Diluted Earnings per Share	$ 0.15			$ 0.09			$ 0.50	$ 0.27
Employee Stock Option
Effect of dilutive securities:
Weighted Average Number Diluted Shares Outstanding Adjustment	25,841			1,346,133			204,639	1,416,434
Restricted Stock
Effect of dilutive securities:
Weighted Average Number Diluted Shares Outstanding Adjustment				78,893			47,314	66,498

EARNINGS PER SHARE INFORMATIO_3

EARNINGS PER SHARE INFORMATION - Stock options (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Restricted Stock
Stock Options
Antidilutive securities	3,250,420		2,639,540
Common Stock
Stock Options
Antidilutive securities	2,353,500	583,500	2,353,500	573,500

ACQUISITIONS - Fair values of t

ACQUISITIONS - Fair values of the assets acquired and the liabilities assumed (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018
Assets acquired
Proved oil and gas properties	$ 296,910,774
Joint interest billing receivable	1,464,394	$ 0
Prepaid assets	2,864,554	0
Liabilities assumed
Accounts and revenues payable	(1,234,862)	0
Asset retirement obligation incurred through acquisition	(2,979,645)	$ 0
Total Identifiable Net Assets	$ 297,025,215

ACQUISITIONS - Business acquisi

ACQUISITIONS - Business acquisition pro forma information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
ACQUISITIONS.
Oil and Gas Revenues	$ 57,004,519	$ 51,167,164	$ 150,137,059	$ 142,417,436
Net Income	$ 9,948,798	$ 14,004,402	$ 33,413,495	$ 38,125,515
Basic Earnings per Share	$ 0.15	$ 0.23	$ 0.49	$ 0.63
Diluted Earnings per Share	$ 0.15	$ 0.22	$ 0.49	$ 0.61

ACQUISITIONS - Additional Infor

ACQUISITIONS - Additional Information (Details) $ / shares in Units, $ in Millions	Apr. 09, 2019USD ($)ashares	Sep. 30, 2019USD ($)	Feb. 25, 2019$ / shares
ACQUISITIONS
Gas and Oil Area, Developed, Net \| a	38,230
Gas and Oil Area, Developed, Gross \| a	49,754
Business Combination, Acquisition Related Costs \| $		$ 4.1
Wishbone Acquisition [Member]
ACQUISITIONS
Payments to Acquire Businesses, Gross \| $	$ 264.1
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares \| shares	4,581,001
Common Stock Held in Escrow \| shares	2,538,071
Business Acquisition, Share Price \| $ / shares			$ 6.19
Average Working Interest [Member]
ACQUISITIONS
Business Acquisition, Percentage of Voting Interests Acquired	77.00%
Average Net Revenue Interest [Member]
ACQUISITIONS
Business Acquisition, Percentage of Voting Interests Acquired	58.00%

DERIVATIVE FINANCIAL INSTRUME_3

DERIVATIVE FINANCIAL INSTRUMENTS (Details)	Sep. 30, 2019a$ / bbl
Commodity Contract
Barrels per day \| a	1,500
Commodity Contract \| Put Option
Put price	50
Commodity Contract \| Call Option
Call price	66
Commodity Contract A
Barrels per day \| a	500
Commodity Contract A \| Put Option
Put price	50
Commodity Contract A \| Call Option
Call price	67.40
Commodity Contract B
Barrels per day \| a	500
Commodity Contract B \| Put Option
Put price	50
Commodity Contract B \| Call Option
Call price	67.90
Commodity Contract C
Barrels per day \| a	1,000
Commodity Contract C \| Put Option
Put price	50
Commodity Contract C \| Call Option
Call price	68.71
Commodity Contract D
Barrels per day \| a	1,000
Commodity Contract D \| Put Option
Put price	50
Commodity Contract D \| Call Option
Call price	69.50
Commodity Contract E
Barrels per day \| a	1,000
Commodity Contract E \| Put Option
Put price	50
Commodity Contract E \| Call Option
Call price	70.20
Commodity Contract F
Barrels per day \| a	1,000
Commodity Contract F \| Put Option
Put price	50
Commodity Contract F \| Call Option
Call price	65.83
Commodity Contract G
Barrels per day \| a	1,000
Commodity Contract G \| Put Option
Put price	50
Commodity Contract G \| Call Option
Call price	65.40

DERIVATIVE FINANCIAL INSTRUME_4

DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details)	Nov. 05, 2018USD ($)	Dec. 31, 2019bbl$ / bbl	Sep. 30, 2019bbl	Dec. 31, 2018$ / bbl	Oct. 27, 2017bbl	Sep. 25, 2017bbl
Number Of Barrels Per Day \| bbl						1,000
Payments For Termination Of Derivative Contracts \| $	$ 3,438,300
Call Option
Derivative, Price Risk Option Strike Price				54.60
Put Option
Derivative, Price Risk Option Strike Price				49
April 2019 through December 2019
Number Of Barrels Per Day \| bbl			5,500
January 2020 through December 2020
Number Of Barrels Per Day \| bbl			2,000
Additional Derivative Contracts
Number Of Barrels Per Day \| bbl					1,000
Additional Derivative Contracts \| Call Option
Derivative, Price Risk Option Strike Price				54.80
Additional Derivative Contracts \| Put Option
Derivative, Price Risk Option Strike Price				51
Additional Derivative Contracts \| Scenario Forecast
Number Of Barrels Per Day \| bbl		2,000
Additional Derivative Contracts \| Scenario Forecast \| Call Option
Derivative, Price Risk Option Strike Price		70.05
Additional Derivative Contracts \| Scenario Forecast \| Put Option
Derivative, Price Risk Option Strike Price		60

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring	Sep. 30, 2019USD ($)
Oil and gas derivative contracts	$ 3,066,913
Total	3,066,913
Fair Value, Inputs, Level 1
Oil and gas derivative contracts	0
Total	0
Fair Value, Inputs, Level 2
Oil and gas derivative contracts	3,066,913
Total	3,066,913
Fair Value, Inputs, Level 3
Oil and gas derivative contracts	0
Total	$ 0

REVOLVING LINE OF CREDIT (Detai

REVOLVING LINE OF CREDIT (Details) - USD ($)	9 Months Ended
REVOLVING LINE OF CREDIT (Details) - USD ($)	Sep. 30, 2019	Apr. 30, 2019	Dec. 31, 2018
REVOLVING LINE OF CREDIT
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000,000
Borrowing Base of Credit Facility		$ 425,000,000
Debt Instrument, Basis Spread on Variable Rate	0.00%
Long-term Line of Credit	$ 366,500,000		$ 39,500,000
Minimum
REVOLVING LINE OF CREDIT
Debt Instrument, Basis Spread on Variable Rate	0.75%
Leverage Ratio	1.00%
Maximum
REVOLVING LINE OF CREDIT
Debt Instrument, Basis Spread on Variable Rate	1.75%
Leverage Ratio	4.00%
LIBOR
REVOLVING LINE OF CREDIT
Debt Instrument, Basis Spread on Variable Rate	1.00%
LIBOR \| Minimum
REVOLVING LINE OF CREDIT
Debt Instrument, Basis Spread on Variable Rate	1.75%
LIBOR \| Maximum
REVOLVING LINE OF CREDIT
Debt Instrument, Basis Spread on Variable Rate	2.75%
Federal Funds
REVOLVING LINE OF CREDIT
Debt Instrument, Basis Spread on Variable Rate	0.50%

ASSET RETIREMENT OBLIGATION (De

ASSET RETIREMENT OBLIGATION (Details) - USD ($)	9 Months Ended
ASSET RETIREMENT OBLIGATION (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018
ASSET RETIREMENT OBLIGATION
Beginning balance	$ 13,055,797
Liabilities acquired	2,979,645
Liabilities incurred	602,090
Liabilities settled	(615,732)
Accretion expense	681,386	$ 493,223
Ending balance	$ 16,703,186

STOCKHOLDERS' EQUITY - Common s

STOCKHOLDERS' EQUITY - Common stock issued in option exercise (Details)	9 Months Ended
	Sep. 30, 2018USD ($)$ / sharesshares
Options exercised	143,000
Exercise price \| $ / shares	$ 3.29
Shares issued	103,113
Shares retained	39,887
Stock price on date of exercise \| $ / shares	$ 11.80
Aggregate value of shares retained \| $	$ 470,750
Exercised Option 1 [Member]
Options exercised	25,000
Exercise price \| $ / shares	$ 7.50
Shares issued	9,829
Shares retained	15,171
Stock price on date of exercise \| $ / shares	$ 12.36
Aggregate value of shares retained \| $	$ 187,500
Exercised Option 2 [Member]
Options exercised	3,000
Exercise price \| $ / shares	$ 8
Shares issued	1,059
Shares retained	1,941
Stock price on date of exercise \| $ / shares	$ 12.36
Aggregate value of shares retained \| $	$ 24,000
Exercised Option 3 [Member]
Options exercised	3,000
Exercise price \| $ / shares	$ 5.25
Shares issued	1,750
Shares retained	1,250
Stock price on date of exercise \| $ / shares	$ 12.36
Aggregate value of shares retained \| $	$ 15,750
Exercised Option 4 [Member]
Options exercised	2,000
Exercise price \| $ / shares	$ 11.75
Shares issued	100
Shares retained	1,900
Stock price on date of exercise \| $ / shares	$ 12.36
Aggregate value of shares retained \| $	$ 23,500
Exercised Option 5 [Member]
Options exercised	110,000
Exercise price \| $ / shares	$ 2
Shares issued	90,375
Shares retained	19,625
Stock price on date of exercise \| $ / shares	$ 11.21
Aggregate value of shares retained \| $	$ 220,000

STOCKHOLDERS' EQUITY - Addition

STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($)	1 Months Ended		9 Months Ended
	Apr. 30, 2019	Feb. 28, 2018	Sep. 30, 2019	Sep. 30, 2018	Feb. 25, 2019
STOCKHOLDERS' EQUITY
Share Price				$ 11.80
Proceeds from issuance of common stock, net of offering costs			$ 0	$ 81,815,022
Shares issued				103,113
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period				103,113
Wishbone Partners, LLC
STOCKHOLDERS' EQUITY
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	4,581,001
Common Stock Held in Escrow	2,538,071
Business Acquisition, Share Price					$ 6.19
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned					$ 28,356,396
Underwritten Public Offering
STOCKHOLDERS' EQUITY
Stock Issued During Period, Shares, New Issues		6,164,000
Share Price		$ 14
Proceeds From Issuance Of Common Stock Gross		$ 86,296,000
Proceeds from issuance of common stock, net of offering costs		81,819,073
Payments of Stock Issuance Costs		$ 4,476,927
Over-Allotment Option
STOCKHOLDERS' EQUITY
Stock Issued During Period, Shares, New Issues		804,000

EMPLOYEE STOCK OPTIONS AND RE_3

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Stock Options (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN
Weighted Average Exercise Price, Exercised		$ 3.29
Equity Option
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN
Options Outstanding at beginning of the year	2,751,000	3,193,000
Granted	0	0
Forfeited or rescinded	(2,500)	(24,500)
Exercised	0	(143,000)
Options Outstanding at end of year	2,748,500	3,025,500
Options Exercisable at end of year	2,329,400	2,265,400
Weighted Average Exercise Price, Outstanding at beginning of the year	$ 6.28	$ 6.07
Weighted Average Exercise Price, Granted	0	0
Weighted Average Exercise Price, Forfeited or rescinded	11.70	11.39
Weighted Average Exercise Price, Exercised	0	3.29
Weighted Average Exercise Price, Outstanding at end of year	6.28	6.15
Weighted Average Exercise Price, Exercisable at end of year	$ 5.43	$ 4.92
Options Outstanding - Weighted-Average Remaining Contractual Life (in years)	4 years 2 months 12 days	5 years 3 months 18 days
Options Exercisable - Weighted-Average Remaining Contractual Life (in years)	3 years 8 months 12 days	4 years 7 months 6 days
Aggregate Intrinsic Value	$ 0	$ 12,470,645

EMPLOYEE STOCK OPTIONS AND RE_4

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Restricted Stock (Details) - Restricted Stock - $ / shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN
Restricted stock, Outstanding at beginning of the year	878,360	330,900
Restricted stock, Granted	20,400	4,500
Restricted stock, Forfeited or rescinded	(5,940)	(4,000)
Restricted stock, Vested	(900)	0
Restricted stock, Outstanding at end of year	891,920	331,400
Weighted-Average Grant Date Fair Value, Outstanding at beginning of the year	$ 7.36	$ 13.44
Weighted-Average Grant Date Fair Value, Granted	4.59	11.40
Weighted-Average Grant Date Fair Value, Forfeited or rescinded	6.88	13.44
Weighted-Average Grant Date Fair Value, Vested	11.40	0
Weighted-Average Grant Date Fair Value, Outstanding at end of year	$ 7.30	$ 13.41

EMPLOYEE STOCK OPTIONS AND RE_5

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	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	$ 792,836	$ 1,007,789	$ 2,436,035	$ 3,091,336
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
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	665,160		665,160
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased	$ 1.64	$ 9.91	$ 1.64	$ 9.91
Employee Stock Option
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 919,908		$ 919,908
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 7 months 6 days
Restricted Stock
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK AWARD PLAN
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 3,451,385		$ 3,451,385
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 1 month 6 days

CONTINGENCIES AND COMMITMENTS (

CONTINGENCIES AND COMMITMENTS (Details) - USD ($)	9 Months Ended
CONTINGENCIES AND COMMITMENTS (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2018
CONTINGENCIES AND COMMITMENTS
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000,000
Standby letters of credit drawn	327,000,000	$ 17,000,000
Standby Letters of Credit
CONTINGENCIES AND COMMITMENTS
Standby letters of credit drawn	0
Surety Bonds
CONTINGENCIES AND COMMITMENTS
Issued surety bonds	$ 500,438
Extended term for surety bonds (in years)	1 year
Surety bonds renewal amount	$ 400,000
Surety bonds renewal amount, not applicable	100,438
State and federal agencies \| Standby Letters of Credit
CONTINGENCIES AND COMMITMENTS
Line of Credit Facility, Maximum Borrowing Capacity	$ 260,000
Extended term under letter of credit arrangement (in years)	1 year
Electric utility companies \| Standby Letters of Credit
CONTINGENCIES AND COMMITMENTS
Line of Credit Facility, Maximum Borrowing Capacity	$ 741,000
Debt Term (in years)	1 year