MIDLAND, Texas--(BUSINESS WIRE)--Ring Energy, Inc. (NYSE MKT: REI) (“Ring” or the “Company”) today announced its operations update for the third quarter of 2014. During the third quarter, Ring drilled 32 new wells on its Permian Basin properties in Andrews County, Texas, making a total of 132 new wells drilled since securing a rig in early June 2013. Nineteen of the 32 wells were completed and placed in production and the remaining 13 wells are in various stages of completion.
Net production for the quarter ended September 30, 2014 was approximately 140,000 BOEs (Barrels of Oil Equivalent), as compared to net production of approximately 39,000 BOEs for the same quarter of 2013, a 259% increase, and a 19% increase over the net production of 118,000 BOEs in the second quarter of 2014. In September, weather related issues resulted in temporary drilling and completion delays, resulting in production declines. The average net daily production for September was approximately 1,535 BOEs per day.
Management also announced the addition of a third drilling rig. The rig has recently completed drilling the Company’s third salt water disposal well in 2014 and is currently drilling a fourth. Upon completion the rig will begin drilling oil wells on the Company’s Permian acreage. The Company plans to continue drilling approximately 15 new wells per month on its Texas properties for the remainder of 2014.
The Company’s land department continues to add acreage through its leasing and acquisition activity. In the third quarter Ring added approximately 1,750 acres to its Permian assets representing an additional 175 potential locations on 10 acre spacing.
In Kansas, the Company has begun the second phase of drilling. The first phase was comprised of drilling four wells, of which two were completed and put into production. The combined gross daily production has remained steady at approximately 45 BOEs. The second phase will comprise the drilling of five or six new wells plus 3D seismic. The Company is currently evaluating the results of the first three wells drilled in the second phase and is about to begin shooting the seismic.
Mr. Kelly Hoffman, CEO of Ring stated, “July and August were excellent months. In September, we encountered excessive rainfall making it virtually impossible to move our rigs or transport our production because of the road conditions. At one point we had as many as 20 wells shut in because of the inability to get service trucks to location. As a result of accelerating our drilling time and the addition of the third rig in Texas, we have increased our capital expenditure budget for 2014 from $115 million to $125 million, which will be funded by current cash flow and existing cash balances. Internally, we continue to increase our acreage position and estimate the Company has over 2,100 potential drilling locations on 40, 20 and 10 acre spacing, and are continually seeking opportunities to add to it.”
About Ring Energy, Inc.
Ring Energy, Inc. is an oil and gas exploration, development and
production company with current operations in Texas and Kansas.
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 that involve a wide variety of risks and uncertainties, including, without limitations, statements with respect to the Company’s strategy and prospects. Such statements are subject to certain risks and uncertainties which are disclosed in the Company’s reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2013, its Form 10-Q for the quarter ended June 30, 2014 and its other filings with the SEC. Readers and investors are cautioned that the Company’s actual results may differ materially from those described in the forward-looking statements due to a number of factors, including, but not limited to, the Company’s ability to acquire productive oil and/or gas properties or to successfully drill and complete oil and/or gas wells on such properties, general economic conditions both domestically and abroad, and the conduct of business by the Company, and other factors that may be more fully described in additional documents set forth by the Company.