Ring Energy, Inc. Initiates Year End Drilling Program
December 03 2020 - 4:05PM
Business Wire
Company Increases
Hedging Position for 2021
Ring Energy, Inc. (NYSE American: REI) (“Ring”) (“Company”)
announced today it initiated drilling operations on its first new
horizontal well in ten months. The Badger 709 B #6XH was spud early
Wednesday morning, December 2, 2020, on Ring’s Northwest Shelf
(“NWS”) leasehold in Yoakum County, Texas. The well will be a
one-and-a-half-mile horizontal San Andres oil well drilled to a
vertical depth of approximately 5,000’.
Additionally, Ring Energy, Inc. entered into swap derivative
contracts for 2,000 Bopd for calendar year 2021 at a price of
$45.37/BO, and two 500 Bopd swaps for calendar year 2021 at a price
of $45.38/BO and $45.00/BO, respectively. This brings Ring’s total
calendar year 2021 oil hedge position to 7,500 Bopd (see hedge
table below).
Effective Volume Floor Ceiling
Commodity Date
End Date (Bbl/d) Structure
Swap Price Price Price
WTI - Crude
1/1/2021
12/31/2021
1,000
Costless Collar
-
$45.00
$52.71
WTI - Crude
1/1/2021
12/31/2021
1,000
Costless Collar
-
$45.00
$55.08
WTI - Crude
1/1/2021
12/31/2021
1,000
Costless Collar
-
$40.00
$55.08
WTI - Crude
1/1/2021
12/31/2021
1,500
Costless Collar
-
$40.00
$55.35
WTI - Crude
1/1/2021
12/31/2021
2,000
Swap
$45.37
-
-
WTI - Crude
1/1/2021
12/31/2021
500
Swap
$45.38
-
-
WTI - Crude
1/1/2021
12/31/2021
500
Swap
$45.00
-
-
(MMBtu/d)
HH-Nat Gas
1/1/2021
12/31/2021
6,000
Swap
$2.991
-
-
HH-Nat Gas
1/1/2022
12/31/2022
5,000
Swap
$2.726
-
-
Paul D. McKinney, Chief Executive Officer and Chairman of the
Board, commented, “We are excited to end the year drilling on our
NWS properties where we can generate exceptional rates-of-return
greater than 90% at prevailing oil and natural gas prices. After
drilling the Badger #6XH, the drilling rig will move to another
horizontal San Andres location currently under construction with
plans to drill another well after the New Year. These wells will be
paid for out of cash surplus currently on hand.” Mr. McKinney
continued by commenting, “We have added more to our hedge position
for 2021. It is important during volatile markets like these to
protect our future cash flows and strengthen our balance sheet. We
intend to allocate the majority of our future cash flow to paying
down debt with the remainder being invested in capital projects
that maintain or improve our daily production and create additional
liquidity.”
Mr. McKinney further added, “Our Bank Borrowing Base
Redetermination continues on schedule and we anticipate the results
before the Christmas holidays.”
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration, development and
production company with current operations in Texas and New Mexico.
www.ringenergy.com
Safe Harbor Statement
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements involve a wide variety of risks and uncertainties, and
include, without limitations, statements with respect to the
Company’s strategy and prospects. Such statements are subject to
certain risks and uncertainties which are disclosed in the
Company’s reports filed with the SEC, including its Form 10-K for
the fiscal year ended December 31, 2019, its Form 10Q for the
quarter ended September 30, 2020 and its other filings with the
SEC. Readers and investors are cautioned that the Company’s actual
results may differ materially from those described in the
forward-looking statements due to a number of factors, including,
but not limited to, the Company’s ability to acquire productive oil
and/or gas properties or to successfully drill and complete oil
and/or gas wells on such properties, general economic conditions
both domestically and abroad, and the conduct of business by the
Company, and other factors that may be more fully described in
additional documents set forth by the Company.
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version on businesswire.com: https://www.businesswire.com/news/home/20201203005995/en/
David Fowler, President Ring Energy, Inc. (432) 682-7464
Bill Parsons K M Financial, Inc. (702) 489-4447
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