Ring Energy Inc. said Tuesday it has entered a deal to sell a portion of its Permian Basin acreage to an undisclosed party for $31.5 million.
The property covers about 20,000 net acres in the Delaware sub-basin in Culberson and Reeves counties, TX, and is currently producing 575 b/d of oil and 2 MMcf/d of natural gas.
Engineering firm Cawley, Gillespie and Associated estimated the property’s year-end proved developed producing reserves to be 3.48 million bbl oil and 10.06 Bcf of natural gas, with a pre-tax discounted present value (aka PV-10) of about $43 million, assuming average oil and gas prices of $52.41/bbl and $1.47/Mcf, respectively.
Ring CEO Kelly Hoffman said that proceeds would be used to pay down the company’s senior credit facility. “The current environment mandates a cautious, conservative approach going forward, and strengthening our balance sheet is a step in the right direction.”
Ring is focusing efforts on the Permian’s Northwest Shelf and Central Basin Platform areas, where the firm reported 4Q2019 average net production of 6,489 Boe (87% oil) and 3,936 boe/d (96% oil), respectively.
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