Ring Energy Bolsters Permian Basin Presence with Strategic Acquisition

Ring Energy, Inc. (NYSE American: REI) has announced an accretive bolt-on acquisition of the Central Basin Platform (CBP) assets of Lime Rock Resources IV, LP (Lime Rock), further strengthening its position in the Permian Basin. The transaction, valued at $100 million, is expected to close by the end of the first quarter of 2025 and represents another opportunity for Ring to create shareholder value through improved operations and synergy capture.

The acquisition of Lime Rock's CBP assets aligns with Ring's long-term strategic vision of consolidating producing assets in core counties on the CBP, defined by shallow declines, high margin production, and undeveloped inventory that immediately competes for capital. The transaction is expected to be immediately accretive to Ring's per share financial and operating metrics, including cash flow per share, free cash flow per share, free cash flow yield, net production per share, net proved reserves per share, and return on capital employed (ROCE). Additionally, the acquisition is expected to lower Ring's lease operating costs (LOE) per barrel of oil equivalent (Boe), gathering, processing, and transportation (GP&T) per Boe, and general and administrative (G&A) expense per Boe.



The Lime Rock position has been a key target for Ring, as the Company has historically sought to consolidate producing assets in core counties on the CBP. The acquisition represents another opportunity for Ring to seamlessly integrate strategic, high-quality assets with its existing operations and create shareholder value through improved operations and synergy capture. The Lime Rock position has approximately 17,700 net acres (100% HBP) contiguous to Ring's existing footprint, with 2,300 Boe/d (>80% Oil) of low-decline average Q3 2024 net production from ~101 gross wells. The transaction is expected to be accretive to Ring's per share financial and operating metrics, with an attractive valuation of less than 85% of Proved Developed (PD) PV-101,2.

The acquisition of Lime Rock's CBP assets is expected to increase Ring's scale and operational synergies, expand its legacy CBP footprint, and identify cost reduction opportunities. The transaction is expected to be highly accretive to Ring's cash flow per share, free cash flow per share, free cash flow yield, net production per share, net proved reserves per share, and return on capital employed (ROCE). Additionally, the acquisition is expected to lower Ring's lease operating costs (LOE) per barrel of oil equivalent (Boe), gathering, processing, and transportation (GP&T) per Boe, and general and administrative (G&A) expense per Boe.

In conclusion, Ring Energy's acquisition of Lime Rock's Central Basin Platform assets is a strategic move that aligns with the Company's long-term vision of consolidating producing assets in core counties on the CBP. The transaction is expected to be immediately accretive to Ring's per share financial and operating metrics, lower operating costs, and strengthen the Company's position in the Permian Basin. As Ring continues to execute its proven strategy of capturing synergies and expanding its CBP platform operations, investors can expect the Company to create shareholder value through improved operations and synergy capture.