Company Acquires Premium Acreage in Andrews County
MIDLAND, Texas–(BUSINESS WIRE)–Ring Energy, Inc. (NYSE American: REI) (“Company”) (“Ring”) announced today that it has entered into a Purchase and Sale Agreement with Tessara Petroleum Resources, a wholly owned subsidiary of The Carlyle Group L.P. (NASDAQ: CG) (“Carlyle”), to acquire assets located in Andrews County, Texas for 2,623,948 shares of common stock of the Company valued at $5.80 per share. The closing date of the transaction will be prior to year-end 2018, with an effective date of November 1, 2018.
The assets consist of 4,763 net acres. Ring will be the operator, have a 100% working interest and 75% net revenue interest. The acreage is in, around and contiguous to the Company’s core assets on the Central Basin Platform (“CBP”) and offsets the majority of the Company’s top producing wells. Management estimates that this acquisition, in combination with additional smaller surrounding leases the Company has acquired, will add 5,313 net acres and 55 new gross horizontal drilling locations.
A spokesperson for Carlyle commented, “We are pleased to enter into this transaction with Ring Energy and its management team. We have chosen to receive consideration in the form of stock as we believe Ring is a best-in-class operator and the assets being transferred are synergistic with Ring’s existing properties that lie just across the lease line. We are fortunate to have found a partner that we admire and trust and look forward to seeing Ring increase its scale and value over time.”
Mr. Kelly Hoffman, CEO of Ring stated, “We have continued to look for acquisitions that will complement our existing properties and be immediately accretive. We have been working on acquiring the Carlyle property for over six months. This acquisition lies within the sweet spot of our core CBP operations. This, along with the additional leases we have acquired, based on the one-rig drilling program previously announced, adds over two years of new drilling locations to our current inventory. These additional locations could potentially add as much as $180 million of PV-10 value, or approximately $2.85 per share, at a realized price of $45 per BOE even after the issuance of the transaction shares.”
SunTrust Robinson Humphrey acted as financial advisor to Ring.
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration, development and production company with current operations in Texas.