Summary of RING ENERGY, INC.

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

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

Forward-Looking Statements

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

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

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

References made in this Item 2

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

References made to our oil and gas operations are the results we obtained from oil derived from a well known as the Eastland #1, in which we own a 25% working interest (18ž% net revenue interest) and which is located on a 440 acre oil and gas prospect in Howard County, Texas.

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

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

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

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

Liquidity and Capital Resources

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

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

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

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

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

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

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

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

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

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

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

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

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

Off-balance sheet arrangements

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