Ring Energy announced that it has agreed to acquire North Central Basin Platform assets, located in Southwest Yoakum County, Texas and East Lea County, New Mexico, from Wishbone Energy Partners and its affiliates.
Ring Energy is purchasing the assets for a total price of $300m, comprised of $270m of cash and $30m of common stock of the company. The deal is expected to close early in the second quarter of 2019, with an effective date of 1 November 2018.
For this acquisition, SunTrust Bank has provided a financing commitment letter for an increased $1bn senior credit facility with a borrowing base of $425m. SunTrust Robinson Humphrey is expected to serve as a lead arranger and book manager for the financing.
Following the completion of the transaction, Ring would operate the assets consist of 49,754 gross acres of mostly contiguous leasehold, which is adjacent to the prolific Wasson and Brahaney fields. It will have a 77% working interest and a 58% net revenue interest.
The acquisition consists of a base of 127 gross wells currently producing an average daily net production of 6,000Boe and the assets are approximately 96% operated by current production volume.
The company said that the current infrastructure includes 1,385 acres of owned surface rights, 21 saltwater disposal wells, 15 source water wells, five frac ponds and three caliche pits for road material and new locations.
Ring CEO Kelly Hoffman said: “We are thrilled to announce the acquisition of these properties from Wishbone and appreciate the effort of all parties involved. The future is very bright based on the great results from its existing wells combined with the exceptional results we are experiencing with our on-going drilling and development program.
“This acquisition doubles our daily production, adds another 37,000 prime acres to our horizontal footprint and nearly doubles our proved reserves. We now have over twenty years of San Andres horizontal drilling inventory using a 2-rig development program.”