Ring Energy (REI) 10-Q 9 May 17 2017 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 09, 2017
Document Information [Line Items]
Entity Registrant Name	RING ENERGY, INC.
Entity Central Index Key	1,384,195
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	REI
Entity Common Stock, Shares Outstanding		49,166,710

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current Assets
Cash	$ 55,418,128	$ 71,086,381
Accounts receivable	4,756,301	3,453,238
Joint interest billing receivable	271,345	454,461
Prepaid expenses and retainers	132,813	226,835
Total Current Assets	60,578,587	75,220,915
Properties and Equipment
Oil and natural gas properties subject to amortization	279,486,903	250,133,965
Inventory for property development	3,711,149	1,582,427
Fixed assets subject to depreciation	1,549,311	1,549,311
Total Properties and Equipment	284,747,363	253,265,703
Accumulated depreciation, depletion and amortization	(44,821,171)	(41,347,152)
Net Properties and Equipment	239,926,192	211,918,551
Deferred Income Taxes	20,308,121	20,051,908
Deferred Financing Costs	338,354	406,025
Total Assets	321,151,254	307,597,399
Current Liabilities
Accounts payable	18,561,210	9,099,391
Total Current Liabilities	18,561,210	9,099,391
Asset retirement obligations	8,329,654	7,957,035
Total Liabilities	26,890,864	17,056,426
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; 49,116,554 shares and 49,113,063 shares outstanding, respectively	49,116	49,113
Additional paid-in capital	336,041,515	335,197,845
Retained loss	(41,830,241)	(44,705,985)
Total Stockholders' Equity	294,260,390	290,540,973
Total Liabilities and Stockholders' Equity	$ 321,151,254	$ 307,597,399

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
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, Outstanding	49,116,554	49,113,063

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Oil and Gas Revenues	$ 12,243,793	$ 6,092,388
Costs and Operating Expenses
Oil and gas production costs	2,705,371	2,490,434
Oil and gas production taxes	583,264	299,271
Depreciation, depletion and amortization	3,474,019	3,394,627
Ceiling test impairment	0	21,412,086
Asset retirement obligation accretion	137,176	109,378
General and administrative expense	2,841,111	2,220,072
Total Costs and Operating Expenses	9,740,941	29,925,868
Gain (Loss) from Operations	2,502,852	(23,833,480)
Other Income (Loss)
Interest expense	0	(415,508)
Interest income	116,679	2,887
Net Other Income (Loss)	116,679	(412,621)
Income (Loss) before tax provision	2,619,531	(24,246,101)
(Provision for) Benefit From Income Taxes	(1,340,250)	8,971,057
Net Income (Loss)	$ 1,279,281	$ (15,275,044)
Basic Income (Loss) per Share	$ 0.03	$ (0.50)
Diluted Income (Loss) per Share	$ 0.03	$ (0.50)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows From Operating Activities
Net income (loss)	$ 1,279,281	$ (15,275,044)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization	3,474,019	3,394,627
Ceiling test impairment	0	21,412,086
Accretion expense	137,176	109,378
Share-based compensation	991,210	584,325
Deferred income tax provision (benefit)	923,390	(8,971,057)
Excess tax deficiency (benefit) related to share-based compensation	416,860	0
Changes in assets and liabilities:
Accounts receivable	(1,119,947)	904,886
Prepaid expenses and retainers	161,693	187,298
Accounts payable	4,761,819	(4,086,181)
Settlement of asset retirement obligation	(8,929)	(1,344)
Net Cash Provided by (Used in) Operating Activities	11,016,572	(1,741,026)
Cash Flows From Investing Activities
Payments to purchase oil and natural gas properties	(3,924,404)	(643,116)
Payments to develop oil and natural gas properties	(19,796,719)	(3,258,542)
Purchase of inventory for development	(2,816,165)	0
Net Cash Used in Investing Activities	(26,537,288)	(3,901,658)
Cash Flows From Financing Activities
Amounts paid for registration statement for future offerings	(147,537)	0
Proceeds from issuance of notes payable	0	5,000,000
Proceeds from option exercise	0	22,500
Net Cash Provided by (Used in) Financing Activities	(147,537)	5,022,500
Net Decrease in Cash	(15,668,253)	(620,184)
Cash at Beginning of Period	71,086,381	4,431,350
Cash at End of Period	55,418,128	3,811,166
Supplemental Cash Flow Information
Cash paid for interest	0	352,662
Noncash Investing and Financing Activities
Asset retirement obligation incurred during development	244,372	39,247
Use of inventory in property development	687,443	0
Capitalized expenditures attributable to drilling projects financed through current liabilities	$ 4,700,000	$ 0

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Significant Accounting Policies [Text Block]	– The accompanying condensed financial statements prepared by Ring Energy, Inc. (the “Company” or “Ring”) have not been audited by an independent registered public accounting firm. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all adjustments necessary for fair presentation of the results of operations for the periods presented, which adjustments were of a normal recurring nature, except as disclosed herein. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. 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 2016 Annual Report on Form 10-K. The Company is a Nevada corporation that owns interests in oil and natural gas properties located in Texas and Kansas. The Company’s oil and natural gas sales, profitability and future growth are dependent upon prevailing and future prices for oil and natural gas and the successful acquisition, exploration and development of oil and natural gas properties. Oil and natural gas prices have historically been volatile and may be subject to wide fluctuations in the future. A substantial decline in oil and natural gas prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows and quantities of oil and natural gas reserves that may be economically produced. – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Changes in the future estimated oil and natural gas reserves or the estimated future cash flows attributable to the reserves that are utilized for impairment analysis could have a significant impact on the Company’s future results of operations. – 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 Financial Accounting Standards Board (FASB) has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for an asset or liability. – The carrying amounts reported for the revolving line of credit approximates fair value because the underlying instruments are at interest rates which approximate current market rates. The carrying amounts of receivables and accounts payable and other current assets and liabilities approximate fair value because of the short-term maturities and/or liquid nature of these assets and liabilities. – 61 34 73 24 Approximately 95 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 engineers. Amortization expense for the three months ended March 31, 2017, was $ 3,474,019 13.09 3,394,627 14.16 72,705 78,878 Write-down of Oil and Gas Properties – 10 During the three months ended March 31, 2016, the Company recorded a $ 21,412,086 Office Equipment – 5 7 – The Company records a liability in the period in which an asset retirement obligation (“ARO”) is incurred, in an amount equal to the discounted estimated fair value of the obligation that is capitalized. Thereafter, this liability is accreted up to the final estimated retirement cost. An ARO is a future expenditure related to the disposal or other retirement of certain assets. The Company’s ARO relates to future plugging and abandonment expenses of its oil and natural gas properties and related facilities disposal. – The Company predominantly derives its revenues from the sale of produced oil and natural gas. Revenue is recorded in the month the product is delivered to the purchasers. At the end of each month, the Company recognizes oil and natural gas sales based on estimates of the amount of production delivered to purchasers and the price to be received. Variances between the Company’s estimated oil and natural gas sales and actual receipts are recorded in the month the payments are received. – The Company has outstanding stock option grants to directors, officers and employees, which are described more fully in Note 6. The Company recognizes the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the related compensation expense over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period. – The Company accounts for share-based compensation issued to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for these issuances is the earlier of (i) the date at which a commitment for performance by the recipient to earn the equity instruments is reached or (ii) the date at which the recipient’s performance is complete. Recently Adopted Accounting Pronouncements 1,596,463 416,860 In August 2016, the FASB issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance will not have a material impact on the Company’s statement of cash flows. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 841). For lessees, the amendments in this update require that for all leases not considered to be short term, a company recognize both a lease liability and right-of-use asset on its balance sheet, representing the obligation to make payments and the right to use or control the use of a specified asset for the lease term. The amendments in this update are effective for annual periods beginning after December 15, 2018. Upon adoption the Company will begin reflect long-term future lease payments as both an asset and a liability on its balance sheet. The adoption of this guidance will not have a material impact on the Company’s financial statements. In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The codification was amended through additional ASUs and, as amended, requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance is effective for annual and interim periods beginning after December 15, 2017. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company will adopt the new standard utilizing the modified retrospective approach. Upon preliminary evaluation, the Company does not expect the adoption of this ASU to have a material impact on its financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. – Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if all contracts to issue common stock were converted into common stock, except for those that are anti-dilutive. The dilutive effect of stock options and other share-based compensation is calculated using the treasury method.

EARNINGS (LOSS) PER SHARE INFOR

EARNINGS (LOSS) PER SHARE INFORMATION	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	NOTE 2 – EARNINGS (LOSS) PER SHARE INFORMATION For The Three Months Ended March 31, 2017 2016 Net Income (Loss) $ 1,279,281 $ (15,275,044) Basic Weighted-Average Shares Outstanding 49,114,731 30,394,360 Effect of dilutive securities: Stock options 1,299,704 - Diluted Weighted-Average Shares Outstanding 50,414,435 30,394,360 Basic Income (Loss) per Share $ 0.03 $ (0.50) Diluted Income (Loss) per Share $ 0.03 $ (0.50) Stock options to purchase 602,500 2,876,150

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	NOTE 3 – 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 (“Administrative Agent”), which was amended on May 18, 2016, June 26, 2015 and July 24, 2014 (as amended, the “Credit Facility”). The Credit Facility provides for a senior secured revolving credit facility with a maximum borrowing amount of $ 500 June 26, 2020 In May 2016, the borrowing base (the “Borrowing Base”) was reduced from the initial $ 100 60 The Borrowing Base will be redetermined semi-annually on each May 1 and November 1, beginning November 1, 2015. The Credit Facility allows for Eurodollar Loans and Base Rate Loans (each as defined in the Credit Facility). The interest rate on each Eurodollar Loan will be the adjusted LIBOR for the applicable interest period plus a margin between 1.75 2.75 0.5% 1.00 2.75 3.75 The Credit Facility contains certain covenants, which, among other things, require the maintenance of (i) a total leverage ratio of not more than 4.0 to 1.0 1.0 to 1.0

ASSET RETIREMENT OBLIGATION

ASSET RETIREMENT OBLIGATION	3 Months Ended
	Mar. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligation Disclosure [Text Block]	NOTE 4 – 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. Balance, December 31, 2016 $ 7,957,035 Liabilities incurred 244,372 Liabilities settled (8,929) Accretion expense 137,176 Balance, March 31, 2017 $ 8,329,654

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2017
Stockholders' Equity Note [Abstract]
Stockholders' Equity Note Disclosure [Text Block]	NOTE 5 – STOCKHOLDERS’ EQUITY Common Stock Issued in Option Exercise During the three months ended March 31, 2016, the Company issued 5,000 4.50 22,500 During the three months ended March 31, 2017, the Company issued 3,491 4,100 2.00 609 13.47 8,200

EMPLOYEE STOCK OPTIONS

EMPLOYEE STOCK OPTIONS	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	NOTE 6 – EMPLOYEE STOCK OPTIONS Compensation expense charged against income for share-based awards during the three months ended March 31, 2017, was $ 991,210 584,325 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 5,000,000 1,367,150 On January 13, 2016, upon the recommendation of the Compensation Committee, Ring rescinded the option awards granted to its employees and directors on December 9, 2015 (other than Messrs. McCabe and Rochford, who are the members of the Compensation Committee) as the result of a significant decline in the stock price and re-issued the option awards as of that date to meet the goals and objectives of the Company’s equity based compensation program. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model and using certain assumptions. The expected volatility is based on the historical price volatility of the Company’s common stock. The Company uses the simplified method for estimating the expected term for options granted. Under the simplified method, the expected term is equal to the midpoint between the vesting period and the contractual term of the stock option. The risk-free interest rate represents the U.S. Treasury bill rate for the expected life of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected life of the stock options. 2016 Weighted-average volatility 100 % Expected dividends 0 Expected term (in years) 6.5 Risk-free interest rate 1.51 % There were no options granted during the three months ended March 31, 2017. Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2016 3,362,350 $ 5.90 Exercised (4,100) 2.00 Outstanding, March 31, 2017 3,358,250 $ 5.90 6.7 Years $ 17,125,840 Exercisable, March 31, 2017 2,029,350 $ 4.11 5.6 Years The intrinsic value was calculated using the closing price on March 31, 2017 of $ 10.82 6,317,761 2.6 47,027

CONTINGENCIES AND COMMITMENTS

CONTINGENCIES AND COMMITMENTS	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]	NOTE 7 – CONTINGENCIES AND COMMITMENTS Standby Letters of Credit – 280,000

BASIS OF PRESENTATION AND SIG13

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting, Policy [Policy Text Block]	Condensed Financial Statements – The accompanying condensed financial statements prepared by Ring Energy, Inc. (the “Company” or “Ring”) have not been audited by an independent registered public accounting firm. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all adjustments necessary for fair presentation of the results of operations for the periods presented, which adjustments were of a normal recurring nature, except as disclosed herein. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. 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 2016 Annual Report on Form 10-K.
Organization And Nature Of Operations [Policy Text Block]	Organization and Nature of Operations – The Company is a Nevada corporation that owns interests in oil and natural gas properties located in Texas and Kansas. The Company’s oil and natural gas sales, profitability and future growth are dependent upon prevailing and future prices for oil and natural gas and the successful acquisition, exploration and development of oil and natural gas properties. Oil and natural gas prices have historically been volatile and may be subject to wide fluctuations in the future. A substantial decline in oil and natural gas prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows and quantities of oil and natural gas reserves that may be economically produced.
Use of Estimates, Policy [Policy Text Block]	Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Changes in the future estimated oil and natural gas reserves or the estimated future cash flows attributable to the reserves that are utilized for impairment analysis could have a significant impact on the Company’s future results of operations.
Fair Value Measurement, Policy [Policy Text Block]	Fair 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 Financial Accounting Standards Board (FASB) has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for an asset or liability.
Fair Value of Financial Instruments, Policy [Policy Text Block]	Fair Values of Financial Instruments – The carrying amounts reported for the revolving line of credit approximates fair value because the underlying instruments are at interest rates which approximate current market rates. The carrying amounts of receivables and accounts payable and other current assets and liabilities approximate fair value because of the short-term maturities and/or liquid nature of these assets and liabilities.
Concentration Risk, Credit Risk, Policy [Policy Text Block]	Concentration of Credit Risk and Major Customer – 61 34 73 24 Approximately 95
Oil and Gas Properties Policy [Policy Text Block]	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 engineers. Amortization expense for the three months ended March 31, 2017, was $ 3,474,019 13.09 3,394,627 14.16 72,705 78,878 Write-down of Oil and Gas Properties – 10 During the three months ended March 31, 2016, the Company recorded a $ 21,412,086
Property, Plant and Equipment, Policy [Policy Text Block]	Office Equipment – 5 7
Asset Retirement Obligations, Policy [Policy Text Block]	Asset Retirement Obligation – The Company records a liability in the period in which an asset retirement obligation (“ARO”) is incurred, in an amount equal to the discounted estimated fair value of the obligation that is capitalized. Thereafter, this liability is accreted up to the final estimated retirement cost. An ARO is a future expenditure related to the disposal or other retirement of certain assets. The Company’s ARO relates to future plugging and abandonment expenses of its oil and natural gas properties and related facilities disposal.
Revenue Recognition, Policy [Policy Text Block]	Revenue Recognition – The Company predominantly derives its revenues from the sale of produced oil and natural gas. Revenue is recorded in the month the product is delivered to the purchasers. At the end of each month, the Company recognizes oil and natural gas sales based on estimates of the amount of production delivered to purchasers and the price to be received. Variances between the Company’s estimated oil and natural gas sales and actual receipts are recorded in the month the payments are received.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	Share-Based Employee Compensation – The Company has outstanding stock option grants to directors, officers and employees, which are described more fully in Note 6. The Company recognizes the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the related compensation expense over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period.
Share-based Compensation, Option and Incentive Plans, Director Policy [Policy Text Block]	Share-Based Compensation to Non-Employees – The Company accounts for share-based compensation issued to non-employees as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for these issuances is the earlier of (i) the date at which a commitment for performance by the recipient to earn the equity instruments is reached or (ii) the date at which the recipient’s performance is complete.
Reclassification, Policy [Policy Text Block]	Reclassifications –
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Adopted Accounting Pronouncements 1,596,463 416,860 In August 2016, the FASB issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance will not have a material impact on the Company’s statement of cash flows. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 841). For lessees, the amendments in this update require that for all leases not considered to be short term, a company recognize both a lease liability and right-of-use asset on its balance sheet, representing the obligation to make payments and the right to use or control the use of a specified asset for the lease term. The amendments in this update are effective for annual periods beginning after December 15, 2018. Upon adoption the Company will begin reflect long-term future lease payments as both an asset and a liability on its balance sheet. The adoption of this guidance will not have a material impact on the Company’s financial statements. In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a joint revenue recognition standard, ASU 2014-09. The new standard removes inconsistencies in existing standards, changes the way companies recognize revenue from contracts with customers, and increases disclosure requirements. The codification was amended through additional ASUs and, as amended, requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance is effective for annual and interim periods beginning after December 15, 2017. The standard is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet. The Company will adopt the new standard utilizing the modified retrospective approach. Upon preliminary evaluation, the Company does not expect the adoption of this ASU to have a material impact on its financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business.
Earnings Per Share, Policy [Policy Text Block]	Basic and Diluted Earnings (Loss) per Share – Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if all contracts to issue common stock were converted into common stock, except for those that are anti-dilutive. The dilutive effect of stock options and other share-based compensation is calculated using the treasury method.

EARNINGS (LOSS) PER SHARE INF14

EARNINGS (LOSS) PER SHARE INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule Of Earnings Per Share Basic And Diluted [Table Text Block]	For The Three Months Ended March 31, 2017 2016 Net Income (Loss) $ 1,279,281 $ (15,275,044) Basic Weighted-Average Shares Outstanding 49,114,731 30,394,360 Effect of dilutive securities: Stock options 1,299,704 - Diluted Weighted-Average Shares Outstanding 50,414,435 30,394,360 Basic Income (Loss) per Share $ 0.03 $ (0.50) Diluted Income (Loss) per Share $ 0.03 $ (0.50)

ASSET RETIREMENT OBLIGATION (Ta

ASSET RETIREMENT OBLIGATION (Tables)	3 Months Ended
	Mar. 31, 2017
Asset Retirement Obligation Disclosure [Abstract]
Schedule of Asset Retirement Obligations [Table Text Block]	Changes in the asset retirement obligation were as follows: Balance, December 31, 2016 $ 7,957,035 Liabilities incurred 244,372 Liabilities settled (8,929) Accretion expense 137,176 Balance, March 31, 2017 $ 8,329,654

EMPLOYEE STOCK OPTIONS (Tables)

EMPLOYEE STOCK OPTIONS (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]	The following are the assumptions used to determine the fair value of options granted during the three months ended March 31, 2016: 2016 Weighted-average volatility 100 % Expected dividends 0 Expected term (in years) 6.5 Risk-free interest rate 1.51 %
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	A summary of the stock option activity as of March 31, 2017, and changes during the three months then ended is as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, December 31, 2016 3,362,350 $ 5.90 Exercised (4,100) 2.00 Outstanding, March 31, 2017 3,358,250 $ 5.90 6.7 Years $ 17,125,840 Exercisable, March 31, 2017 2,029,350 $ 4.11 5.6 Years

BASIS OF PRESENTATION AND SIG17

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	3 Months Ended
	Mar. 31, 2017USD ($)$ / Barrel	Mar. 31, 2016USD ($)$ / Barrel
Organization And Summary Of Significant Accounting Policies [Line Items]
Depreciation	$ 72,705	$ 78,878
Amortization expense	$ 3,474,019	$ 3,394,627
Depletion At The Rate Per Barrel | $ / Barrel	13.09	14.16
Estimated Present Value Of Future Net Revenues From Proved Reserves Discounted At An Interest Rate	10.00%
Percentage Of Accounts Receivables	95.00%
Impairment of Oil and Gas Properties		$ 21,412,086
Accounting Standards Update 2016-09 [Member] | Adjustments To Deferred Income Taxes And Retained Loss [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets	$ 1,596,463
Accounting Standards Update 2016-09 [Member] | Adjustments To Income Tax Provision [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income	$ 416,860
Maximum [Member] | Office Equipment [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Minimum [Member] | Office Equipment [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Sales Revenue, Net [Member] | Customer One [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	61.00%
Sales Revenue, Net [Member] | Customer Two [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	34.00%
Accounts Receivable [Member] | Customer One [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	73.00%
Accounts Receivable [Member] | Customer Two [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	24.00%

EARNINGS (LOSS) PER SHARE INF18

EARNINGS (LOSS) PER SHARE INFORMATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net Income (Loss)	$ 1,279,281	$ (15,275,044)
Basic Weighted-Average Shares Outstanding	49,114,731	30,394,360
Effect of dilutive securities:
Stock options	1,299,704	0
Diluted Weighted-Average Shares Outstanding	50,414,435	30,394,360
Basic Income (Loss) per Share	$ 0.03	$ (0.50)
Diluted Income (Loss) per Share	$ 0.03	$ (0.50)

EARNINGS (LOSS) PER SHARE INF19

EARNINGS (LOSS) PER SHARE INFORMATION (Details Textual) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	602,500	2,876,150

REVOLVING LINE OF CREDIT (Detai

REVOLVING LINE OF CREDIT (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Jul. 31, 2014	Mar. 31, 2017	May 01, 2016
Line of Credit Facility [Line Items]
Leverage Ratio, Total		4.0 to 1.0
Minimum Leverage Ratio Current		1.0 to 1.0
Debt Instrument, Redemption, Description		The Borrowing Base will be redetermined semi-annually on each May 1 and November 1, beginning November 1, 2015.
LIBOR [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Interest Rate During Period		1.00%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Maturity Date	Jun. 26, 2020
Line of Credit Facility, Interest Rate Description		0.5%
Line of Credit Facility, Maximum Borrowing Capacity	$ 500
Maximum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate		2.75%
Line of Credit Facility, Maximum Borrowing Capacity			$ 100
Debt Instrument, Interest Rate, Effective Percentage		3.75%
Minimum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.75%
Line of Credit Facility, Maximum Borrowing Capacity			$ 60
Debt Instrument, Interest Rate, Effective Percentage		2.75%

ASSET RETIREMENT OBLIGATION (De

ASSET RETIREMENT OBLIGATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Asset Retirement Obligation [Line Items]
Balance	$ 7,957,035
Liabilities incurred	244,372
Liabilities settled	(8,929)
Accretion expense	137,176	$ 109,378
Balance	$ 8,329,654

STOCKHOLDERS' EQUITY (Details T

STOCKHOLDERS' EQUITY (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Exercise Price 4.50 [Member]
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		5,000
Stock Issued During Period, Value, Stock Options Exercised		$ 22,500
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price		$ 4.50
Exercise Price 2.00 [Member]
Class of Stock [Line Items]
Stock Issued During Period Shares Stock Options Cashless Exercised	4,100
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	3,491
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 2
Common Stock [Member]
Class of Stock [Line Items]
Share Price	$ 13.47
Stock Issued During Period Value, Issued For Consideration	$ 8,200
Stock Issued During Period Shares, Issued For Consideration	609

EMPLOYEE STOCK OPTIONS (Details

EMPLOYEE STOCK OPTIONS (Details)	3 Months Ended
	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average volatility	100.00%
Expected dividends	0.00%
Expected term (in years)	6 years 6 months
Risk-free interest rate	1.51%

EMPLOYEE STOCK OPTIONS (Detai24

EMPLOYEE STOCK OPTIONS (Details 1) - Employee Stock Option [Member]	3 Months Ended
	Mar. 31, 2017USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding, December 31, 2016 | shares	3,362,350
Shares, Exercised | shares	(4,100)
Shares, Outstanding, March 31, 2017 | shares	3,358,250
Shares, Exercisable, March 31, 2017 | shares	2,029,350
Weighted-Average Exercise Price, Outstanding, December 31, 2016 | $ / shares	$ 5.9
Weighted-Average Exercise Price, Exercised | $ / shares	2
Weighted-Average Exercise Price, Outstanding, March 31, 2017 | $ / shares	5.9
Weighted-Average Exercise Price, Exercisable, March 31, 2017 | $ / shares	$ 4.11
Weighted Average Remaining Contractual Term, Outstanding, March 31, 2017	6 years 8 months 12 days
Weighted Average Remaining Contractual Term, Exercisable, March 31, 2017	5 years 7 months 6 days
Aggregate Intrinsic Value, Outstanding | $	$ 17,125,840

EMPLOYEE STOCK OPTIONS (Detai25

EMPLOYEE STOCK OPTIONS (Details Textual) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2013	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,367,150
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 6,317,761
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 7 months 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased	$ 10.82
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 47,027
Compensation Expenses Charged Against Income For Share Based Awards Included In General And Administrative Expenses	$ 991,210	$ 584,325
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

CONTINGENCIES AND COMMITMENTS (

CONTINGENCIES AND COMMITMENTS (Details Textual)	Mar. 31, 2017USD ($)
Standby Letters of Credit [Member]
Loss Contingencies [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 280,000