7:55 AM EDT, 07/13/2017 (MT Newswires) -- Ring Energy(REI) said pre-market Thursday that Q2 net production was 338,000 barrels of oil equivalent (BOEs), up 77% year-over-year.
June average net daily production was 4,110 BOEs, up from net daily production of 2,296 BOEs in the same month last year.
CEO Kelly Hoffman also said the company decided to boost its drilling activity by extending the contract of a current drilling rig through the year-end. By extending the contract, the company expects adding an additional eight to 10 new wells in San Andres in Andrews County, Texas. Originally, the company expected to drill about 22 new horizontal wells in San Andres.
Ring Energy(REI)
Re: Ring Energy(REI)
From John White at Roth Capital on July 13, 2017
During 2Q 2017 REI drilled eight Hz San Andres wells and is currently drilling a ninth on its Central Basin Platform (“CBP”) asset. REI has completed and put into production four of the new wells drilled in 2Q 2017 and two wells that were drilled in 1Q 2017. The remaining four wells drilled in 2Q are awaiting completion. On its Delaware Basin asset, REI drilled two new vertical Cherry Canyon wells, both awaiting completion, and completed two Cherry Canyon wells drilled in 1Q 2017. This means the four Hz San Andres wells and the two Cherry Canyon awaiting completion likely serve as catalysts for the 3Q 2017 operations update or the 2Q 2017 earnings announcement.
Due to these positive results REI has decided to accelerate drilling activity. REI originally planned to drill approximately 22 new Hz San Andres wells. REI now plans to drill an additional eight to 10 new wells. REI noted the economics on these wells work very well with $40/bbl WTI oil prices.
Hz San Andres-Central Basin Platform:
During 2Q 2017, REI drilled five 1.5 mile laterals, three 1.0 mile laterals and is currently drilling a ninth well which is a 1.5 mile lateral. Two of the new wells drilled in 2Q 2017 have been completed, tested and put in production. The two new wells drilled, completed and tested in 2Q 2017, along with two wells that were drilled in 1Q 2017 and completed in 2Q had 24 hour gross initial production (IP) rates ranging from 420 BOE per day to over 1,100 BOE per day with an average gross BOE per day of approximately 750. This continues to exceed prior results and our expectations.
Delaware Basin:
In 2Q 2017, REI drilled two new vertical Cherry Canyon wells, both awaiting completion. In addition, REI completed two new vertical Cherry Canyon wells that were drilled in 1Q 2017.
During 2Q 2017 REI drilled eight Hz San Andres wells and is currently drilling a ninth on its Central Basin Platform (“CBP”) asset. REI has completed and put into production four of the new wells drilled in 2Q 2017 and two wells that were drilled in 1Q 2017. The remaining four wells drilled in 2Q are awaiting completion. On its Delaware Basin asset, REI drilled two new vertical Cherry Canyon wells, both awaiting completion, and completed two Cherry Canyon wells drilled in 1Q 2017. This means the four Hz San Andres wells and the two Cherry Canyon awaiting completion likely serve as catalysts for the 3Q 2017 operations update or the 2Q 2017 earnings announcement.
Due to these positive results REI has decided to accelerate drilling activity. REI originally planned to drill approximately 22 new Hz San Andres wells. REI now plans to drill an additional eight to 10 new wells. REI noted the economics on these wells work very well with $40/bbl WTI oil prices.
Hz San Andres-Central Basin Platform:
During 2Q 2017, REI drilled five 1.5 mile laterals, three 1.0 mile laterals and is currently drilling a ninth well which is a 1.5 mile lateral. Two of the new wells drilled in 2Q 2017 have been completed, tested and put in production. The two new wells drilled, completed and tested in 2Q 2017, along with two wells that were drilled in 1Q 2017 and completed in 2Q had 24 hour gross initial production (IP) rates ranging from 420 BOE per day to over 1,100 BOE per day with an average gross BOE per day of approximately 750. This continues to exceed prior results and our expectations.
Delaware Basin:
In 2Q 2017, REI drilled two new vertical Cherry Canyon wells, both awaiting completion. In addition, REI completed two new vertical Cherry Canyon wells that were drilled in 1Q 2017.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Ring Energy(REI)
John White's valuation of $20.00/share compares to First Call's price target of $17.70. If the HZ San Andres play works, Ring has a lot of running room for us.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group