Ring Energy Announces $25 Million Debt Reduction in Q2 2023 and Sale of Non-Core Delaware Basin Assets
July 05 2023 - 6:45AM
Ring Energy, Inc. (NYSE American: REI) (“Ring” or the “Company”)
today announced a $25 million net reduction of borrowings during
the second quarter on its senior revolving credit facility with a
current borrowing base of $600 million (the “Credit Facility”). The
Company also announced the sale of its non-core asset position in
the West Texas’ Delaware Basin (the “Delaware Transaction”) to an
unaffiliated private buyer.
Ring ended the second quarter of 2023 with $397
million of borrowings outstanding on its recently reaffirmed $600
million borrowing base on its $1 billion Credit Facility. During
the second quarter, the Company paid down debt by $25 million from
its first quarter 2023 balance of $422 million. Ring is targeting
further debt reduction during the second half of 2023, with the
level and timing dependent on hydrocarbon price levels and market
conditions, the timing of the Company’s capital spending, and other
considerations.
The Delaware Transaction was completed in the
second quarter of 2023 and included a gross sales price of $8.25
million. With an effective date of March 1, 2023 and considering
standard purchase price adjustments and transaction costs, Ring
received net proceeds of approximately $7.8 million, which was used
to pay down debt on the Company’s Credit Facility.
Recent production from the Delaware asset
averaged approximately net 240 barrels of oil equivalent per day
(“Boe/d”) (85% oil). Ring is not revising its full year 2023
production guidance as a result of this sale.
Paul D. McKinney, Chairman and Chief Executive
Officer, commented, “Supported by the results from our capital
spending program, our ongoing efforts to drive further efficiencies
in the business, and the net proceeds from the Delaware
Transaction, we generated significant cash flow during the second
quarter of 2023. We used a portion of our excess cash flow to pay
down debt by $25 million, and we look forward to continued debt
reduction during the second half of this year.”
Mr. McKinney added, “We were pleased to complete
the sale of our non-core Delaware Basin assets. This sale
emphasizes our focus on building and developing our core positions
in the Northwest Shelf and Central Basin Platform that continue to
generate significant returns for our shareholders.”
Mr. McKinney concluded, “The further
strengthening of our balance sheet and financial position has and
will continue to remain the key priority for the Company, and
today’s announcements provide additional tangible examples of our
commitment to this pursuit.”
Separately, and as part of Ring’s continued
focus on maximizing cash flow generation and improving its balance
sheet, the Company is actively pursuing the sale of its operated
assets in New Mexico. Ring is consolidating its development efforts
in its core operating areas in Texas. The New Mexico assets for
sale include approximately 5,700 gross (5,180 net) acres and
currently produce approximately 300 net Boe/d (93% oil).
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration,
development, and production company with current operations focused
on the development of its Permian Basin assets. For additional
information, please visit 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 limitation, 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, 2022, and its other filings.
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 and to successfully drill and complete oil
and/or gas wells on its properties, general economic conditions
both domestically and abroad, and other factors that are more fully
described in SEC filings of the Company.
Contact Information
Al Petrie Advisors
Al Petrie, Senior Partner
Phone: 281-975-2146
Email: apetrie@ringenergy.com
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