By: The Midland Reporter-Telegram – Ring Energy Inc. announced a $25 million net reduction of borrowings during the second quarter on its senior revolving credit facility with a current borrowing base of $600 million.
The company also announced the sale of its non-core asset position in the West Texas’ Delaware Basin to an unaffiliated private buyer.
Ring ended the second quarter of 2023 with $397 million of borrowings outstanding on its recently reaffirmed $600 million borrowing base on its $1 billion Credit Facility. During the second quarter, the company paid down debt by $25 million from its first quarter 2023 balance of $422 million. Ring is targeting further debt reduction during the second half of 2023, with the level and timing dependent on hydrocarbon price levels and market conditions, the timing of the company’s capital spending, and other considerations.
The Delaware transaction was completed in the second quarter and included a gross sales price of $8.25 million. With an effective date of March 1, 2023, and considering standard purchase price adjustments and transaction costs, Ring received net proceeds of approximately $7.8 million, which was used to pay down debt on the company’s credit facility.
Recent production from the Delaware asset averaged approximately net 240 barrels of oil equivalent per day. Ring is not revising its full-year 2023 production guidance as a result of this sale.
Separately, and as part of Ring’s continued focus on maximizing cash flow generation and improving its balance sheet, the company is actively pursuing the sale of its operated assets in New Mexico. Ring is consolidating its development efforts in its core operating areas in Texas. The New Mexico assets for sale include approximately 5,700 gross (5,180 net) acres and currently produce approximately 300 net Boe/d (93% oil).