Permian Basin pure-play Ring Energy Inc. is planning to run only one rig during 2019, as it works to turn cash flow neutral/positive in the second half of the year, while still growing production an estimated 20% year/year.

The Midland, TX-based independent reported Tuesday that completion and clean-up delays had decreased expectations about how many horizontal wells would be drilled in the fourth quarter -- and its forecast for production.

“In late November, early December, we began experiencing delays on a few of the new wells during the completion process and clean-up prior to going into production,” operations chief Danny Wilson, executive vice president, said. “Historically, this process varies from well to well, taking anywhere from 30 to 90 days.”

Ring budgeted for “fewer new horizontal wells” to be drilled sequentially in the final three months of the year, but management had remained hopeful that even with fewer wells drilled, the added carryover from the third quarter would allow the producer to increase current production 10%-plus from 3Q2018.

“With the delays lasting longer than expected, we will not meet that goal but are confident the fourth quarter will show production growth over the third quarter of 2018,” Wilson said. “We remain on budget and are extremely pleased with the results we are seeing from the new wells we have completed.”

Ring in September revised its capital expenditure (capex) budget, indicating at the time it would drill 56 horizontal wells by the end of this year. At the time it also projected a 60% increase in annualized production over 2017. Capital spending for 2018 was boosted by nearly 25% to $197 million to continue to build out infrastructure in the Delaware sub-basin and Central Basin Platform to deliver more natural gas and oil to market.

Management is planning to become cash flow neutral or positive, while still increasing annualized output by double digits next year.

“The management team, as well as our board of directors, have never lost sight of our goal of becoming cash flow positive as rapidly as possible without sacrificing growth,” CEO Kelly Hoffman said. “With a one-rig drilling program, we project turning cash flow neutral/positive in the second half of 2019, while still growing production an estimated 20%-plus for 2019.”

Ring’s forecast assumes it will drill about 28 horizontal wells in 2019. It also is assuming prices will average $50/boe and it can control its costs.

“We continue to demonstrate our ability to drill and develop as efficiently as any operator and will do everything to maintain and control our costs,” Hoffman said. “By maintaining a strong balance sheet and preserving the integrity of our senior credit facility, we eliminate our reliance on the current uncertainty of the capital markets.

“In addition, the removal of the costs associated with one drilling rig provides us additional flexibility to take advantage of prospective acquisition opportunities that not only would be immediately accretive but offer years of additional growth.”

The 2019 capex plan is to be issued by the end of January.