Ring Energy expands Permian basin assets with Founders Oil & Gas acquisition
(WO) – Ring Energy, Inc. has completed its acquisition of the Central Basin Platform (“CBP”) assets of Founders Oil & Gas IV, LLC. 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.
The acquisition is immediately accretive to Ring’s production, reserves and adjusted free cash flow and accelerates Ring’s ability to pay down debt. The acquisition also 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, “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.”
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:
- A cash deposit of $7.5 million paid on July 11, 2023;
- A cash payment of approximately $42.5 million at closing; and
- 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.