Permian Basin operator Ring Energy Inc., whose forte is the Central Basin Platform (CBP), produced 376,000 boe net during the third quarter, an 80% increase from a year ago and an 11% sequential gain, despite weather issues and delays.
The weather-related issues and delays primarily affected natural gas production, the Midland, TX-based independent said. Ring estimates it lost about 9,000 boe net of production during 3Q2017 related to the issues.
In July the company completed a stock offering with net proceeds of $59.2 million; proceeds are being used to fund an accelerated drilling program.
“With the completion of our stock offering in July, the company is postured for steady, sustained growth,” CEO Kelly Hoffman said. “The proceeds have allowed us to accelerate our horizontal drilling and development program by adding a second drilling rig in mid-August and continuing our infrastructure improvements on both our Central Basin Platform and Delaware Basin assets. The results are evident based on the consistent production increases quarter over quarter.”
Between July and September, 12 horizontal wells were completed in the CBP, with drilling underway on two more wells. The average gross initial production rate for 17 horizontal wells completed, tested and put into production since Ring began drilling in the formation late last year is 675 boe/d.
In the Delaware sub-basin, Ring also completed and put into production four vertical Cherry Canyon wells during the third quarter.
Overall company production in September averaged 4,345 boe/d net, versus year-ago output of 2,270 boe/d and from 4,110 boe/d in June. The average estimated price received in September was $42.20/boe.
“Subject to market conditions, we plan on continuing a two-rig horizontal drilling program for the foreseeable future,” Hoffman said. “With two rigs operating we estimate we can drill five to six new horizontal wells per month.
Because of tight oilfield service conditions in the active Permian, Ring took steps to ensure it will have no “unnecessary delays” to fracture (frack) and complete horizontal wells now being drilled, he said.
“Beginning mid-October, we have secured the services of a fracking crew dedicated solely to our company. This will basically ensure the company’s ability to execute its drilling and development program without disruption, providing the company and its investors constant, steady growth.”