Ring Energy, Inc. Announces Results of Fall 2020 Redetermination of Its Senior Credit Facility
December 23 2020 - 8:30AM
Business Wire
Company Also Pays Down Revolver and Adds
Additional Oil Hedges
Ring Energy, Inc. (NYSEAM: REI) (“Ring” or the “Company”)
announced today the results of its fall 2020 redetermination of its
$1 billion senior revolving credit facility (“Credit Facility”).
The borrowing base was set at $350 million, or approximately 6.7%
lower than its previous borrowing base of $375 million. The next
regularly scheduled bank redetermination will be on or around May
1, 2021.
Management also announced that the Company paid down an
additional $45 million against the Credit Facility, or 12.5% from
the $360 million drawn as of September 30, 2020. This leaves the
current amount drawn at $315 million dollars and approximately $35
million in available liquidity (plus cash on hand).
Additionally, the Company provided an update to their oil hedges
for calendar years 2021 and 2022. The Company added 1,500 barrels
of oil per day (“Bopd”) in additional oil hedges consisting of
three 500 Bopd swaps at $45.45, $45.60, and $45.96 per barrel of
oil, respectively. This brings the total amount of oil hedged for
calendar year 2021 to 9,000 Bopd, a 50/50 balance of collars and
swaps. The Company also secured four oil hedges for calendar year
2022, three 500 Bopd swaps at $44.22, $44.75, and $44.97 per barrel
of oil, respectively, and one 250 Bopd swap at $45.98 per barrel of
oil. A complete summary of the Company’s hedge positions for 2021
and 2022 are listed in the table below.
Effective
Floor
Ceiling
Commodity
Date
End
Date
Volume
Structure
Swap
Price
Price
Price
(Bopd)
2021
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
-
-
WTI - Crude
1/1/2021
12/31/2021
500
Swap
$45.45
-
-
WTI - Crude
1/1/2021
12/31/2021
500
Swap
$45.60
-
-
WTI - Crude
1/1/2021
12/31/2021
500
Swap
$45.96
-
-
(MMBtu/d)
HH-Nat Gas
1/1/2021
12/31/2021
6,000
Swap
$2.991
-
-
2022
WTI - Crude
1/1/2022
12/31/2022
500
Swap
$44.22
-
-
WTI - Crude
1/1/2022
12/31/2022
500
Swap
$44.75
-
-
WTI - Crude
1/1/2022
12/31/2022
500
Swap
$44.97
-
-
WTI - Crude
1/1/2022
12/31/2022
250
Swap
$45.98
-
-
(MMBtu/d)
HH-Nat Gas
1/1/2022
12/31/2022
5,000
Swap
$2.726
-
-
Mr. Paul D. McKinney, Ring’s Chief Executive Officer and
Chairman of the Board of Directors, stated, “Strengthening our
balance sheet remains our primary focus and despite the challenges
we’ve faced this year, the Company has reduced debt by $73 million
from the high-water mark set in the second quarter of $388 million
– that is a 19 percent reduction! I am confident that we can
continue to allocate a disproportional amount of our free cash flow
to paying down debt throughout 2021 and allocate the remaining free
cash flow to maintaining or possibly modestly growing our
production.”
Mr. McKinney further remarked “Adding the swaps secures our free
cash flow and ability to maintain our 2021 drilling program without
fear of another retraction in oil prices. With the volatility we
have experienced in oil prices, taking the defensive position we
have with oil hedges is in the best interest of our shareholders at
this time.”
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
Forward-Looking Statements
This press 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. Statements that
are not strictly historical statements constitute forward-looking
statements and may often, but not always, be identified by the use
of such words such as “expects,” “believes,” “intends,”
“anticipates,” “plans,” “estimates,” “forecast,” “guidance,”
“target,” “potential,” “possible,” or “probable” or statements that
certain actions, events or results “may,” “will,” “should,” or
“could” be taken, occur or be achieved. This press release and any
accompanying disclosures may include or reference certain
forward-looking, non-GAAP financial measures, such as free cash
flow, and certain related estimates regarding future performance,
results and financial position. 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/20201223005215/en/
David A. Fowler, President Ring Energy, Inc. (432) 682-7464
Ring Energy (AMEX:REI)
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