Ring Energy will be hosting an EPG luncheon in Houston on May 15. We will be in the San Jacinto room, so seating is limited to 64 so you MUST REGISTER FOR THIS LUNCHEON.
MIDLAND, Texas--(BUSINESS WIRE)--
Company Doubles Estimated Production, Future EBITDA, Proved Reserves and PV-10
Acquisition Creates Largest Horizontal San Andres Company on the Central Basin Platform / Northwest Shelf
Ring Energy, Inc. (NYSE American: REI) (“Company”) (“Ring”) announced today that it has closed its transaction with Wishbone Energy Partners, LLC, Wishbone Texas Operating Company LLC and WB WaterWorks, LLC (“Wishbone”) to acquire their Northwest Shelf assets located primarily in southwest Yoakum County, Texas and eastern Lea County, New Mexico. The total adjusted purchase price for the acquisition was approximately $291 million, comprised of approximately $264 million of cash and 4,581,001 shares of the Company’s common stock. The cash portion of the transaction was paid from the Company’s senior credit facility which had been increased to $1 billion with a borrowing base of $425 million. SunTrust Robinson Humphrey acted as sole lead arranger and sole book manager for the financing. The transaction had an effective date of November 1, 2018.
The assets consist of approximately 49,754 gross (38,230 net) acres of mostly contiguous leasehold. Ring will be the operator and have an average working interest of 77% and average net revenue interest of 58%. The acreage is adjacent to the prolific Wasson and Brahaney fields. There is a base of 127 gross wells currently producing an average daily net production of approximately 5,400 Boe. In addition, current infrastructure includes 1,385 acres of owned surface rights, 21 saltwater disposal wells, 15 water source wells, five frac ponds and three caliche pits for road material and new locations. < My forecast/valuation model for Ring has been updated to include the impact of this deal. It is on the EPG website under the Small-Cap tab.
On a proforma basis, Ring management estimates that this acquisition immediately doubles estimated production, doubles proved reserves(1), doubles future EBITDA, adds over 360 prospective horizontal San Andres locations and increases the Company’s proved NAV/share from $7.46(2) to $11.33(3). The Company has prepared a slide presentation on its website, www.ringenergy.com, which provides a detailed overview of the transaction and its potential value to the Company.
Proved Reserves include PDP, PDNP and PUD.
Proved NAV/share calculated as YE2018 Proved PV-10 based on SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) less total debt divided by current shares outstanding.
Pro forma Proved NAV/share calculated as pro forma YE2018 Proved PV-10 based on SEC pricing ($62.04/Bbl of oil and $3.10/Mcf of gas) less pro forma total debt divided by pro forma shares outstanding.
Management intends to release its 2019 capital expenditure budget (“CAPEX”) prior to the end of April. It will include a second contract rig which is scheduled to begin drilling on the newly acquired assets within the next seven days.
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.
Ring Energy's "BIG DEAL" has closed
Ring Energy's "BIG DEAL" has closed
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Ring Energy's "BIG DEAL" has closed
Just received this note from John White at Roth Capital 4/12/2019:
"Our valuation is based on a net asset value (NAV) analysis which produced $11.81 per share which we adjusted higher to $12.00 per share, which is our target price."
REI announced today that it has closed its transaction with Wishbone Energy Partners, LLC, to acquire its Northwest Shelf assets located primarily in southwest Yoakum County, Texas and eastern Lea County, New Mexico. The total adjusted purchase price for the acquisition was approximately $291 million, comprised of approximately $264 million of cash and 4.6 million shares of REI common stock. The cash portion of the transaction was paid from the senior credit facility.
The assets consist of approximately 38,230 net acres of mostly contiguous leasehold. REI will be the operator and have an average working interest of 77%. There is a base of 127 gross wells currently producing an average daily net production of approximately 5,400 BOE. In addition, current infrastructure includes 1,385 acres of owned surface rights, 21 saltwater disposal wells, 15 water source wells and five frack.
On a pro forma basis, REI estimates that this acquisition immediately doubles estimated production, doubles proved reserves, and adds over 360 prospective Hz San Andres locations.
We will further review this transaction and update our estimates accordingly.
"Our valuation is based on a net asset value (NAV) analysis which produced $11.81 per share which we adjusted higher to $12.00 per share, which is our target price."
REI announced today that it has closed its transaction with Wishbone Energy Partners, LLC, to acquire its Northwest Shelf assets located primarily in southwest Yoakum County, Texas and eastern Lea County, New Mexico. The total adjusted purchase price for the acquisition was approximately $291 million, comprised of approximately $264 million of cash and 4.6 million shares of REI common stock. The cash portion of the transaction was paid from the senior credit facility.
The assets consist of approximately 38,230 net acres of mostly contiguous leasehold. REI will be the operator and have an average working interest of 77%. There is a base of 127 gross wells currently producing an average daily net production of approximately 5,400 BOE. In addition, current infrastructure includes 1,385 acres of owned surface rights, 21 saltwater disposal wells, 15 water source wells and five frack.
On a pro forma basis, REI estimates that this acquisition immediately doubles estimated production, doubles proved reserves, and adds over 360 prospective Hz San Andres locations.
We will further review this transaction and update our estimates accordingly.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group