Ring Energy, Inc. announced it has completed its previously announced acquisition (the “Transaction”) of the Central Basin Platform (“CBP”) assets of Founders Oil & Gas IV, LLC (“Founders”). Founders’ CBP operations are located in the Permian Basin in Ector County, Texas and are focused on the development of approximately 3,600 net acres that are similar to Ring’s CBP assets acquired in 2022 from Stronghold Energy Operating II, LLC and its affiliate (“Stronghold”).
KEY HIGHLIGHTS
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Immediately accretive to Ring’s production, reserves and Adjusted Free Cash Flow(1);
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Accelerates Ring’s ability to pay down debt; and
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Further increases Ring’s inventory of low-risk, high rate-of-return drilling locations, allowing capital allocation flexibility for Ring.
Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “We are pleased to inform our shareholders that we closed our previously announced acquisition of Founders Oil & Gas CBP assets on August 15, 2023. This Transaction complements our conventional-focused CBP asset position in the Permian Basin with assets that are similar to the CBP assets we acquired in the third quarter of last year. Our near-term focus is to quickly integrate these operations into our business, while at the same time formalizing detailed development plans for the acquired assets. Similar to our other inventory in the area, these assets have stacked pay zones of high-quality rock with proven performance. We intend to leverage our extensive expertise applying the newest conventional and unconventional technologies to optimally develop the acquired inventory of undeveloped drilling locations. In summary, we view this acquisition as another example of creating value through our value focused proven strategy and further positions the Company to deliver on our long-term goals for our shareholders.”
TRANSACTION CONSIDERATION
After taking into account preliminary closing adjustments for interim cash flow based on the effective date of April 1, 2023 and other customary items, consideration for the Transaction consisted of
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A cash deposit of $7.5 million paid on July 11, 2023;
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A cash payment of approximately $42.5 million at closing; and
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A deferred cash payment of $15.0 million due on or about December 15, 2023.
The cash payment at closing was funded with borrowings under Ring’s senior revolving credit facility.
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.