Ring Energy Closes Acquisition of CBP Assets from Lime Rock

Ring Energy, Inc. said it has completed its acquisition of the Central Basin Platform (CBP) assets of Lime Rock Resources IV LP in the Permian Basin for approximately $73.6 million in cash and about 6.5 million shares of its common stock.

The assets cover around 17,700 net acres in the Permian Basin in Andrews County, Texas. Majority of the assets are similar to Ring’s existing CBP assets in the Shafter Lake area and the remaining acreage exposes it to new active plays, the company said in a news release.

After considering preliminary purchase price adjustments, the transaction consideration consists of a cash payment of approximately $63.6 million, a $10.0 million deferred cash payment due on or about December 31, and the issuance of approximately 6.5 million shares of common stock.

The cash payment at closing was funded with cash on hand and borrowings under Ring’s senior revolving credit facility, the company said.

Texas-based Ring noted that the acquisition solidifies its position as a “leading conventional Permian consolidator” while strengthening its operational and financial base.

The assets include production of 2,300 barrels of oil equivalent per day (boepd) of low-decline net production from around 101 gross wells, which Ring estimates will drive $34 million of 2025 adjusted earnings before interest, taxes, depreciation, and amortization. The 17,700 net acres are mostly contiguous to Ring’s existing footprint and expand its legacy CBP footprint “with seamless integration and identified cost reduction opportunities,” the company stated.

More than 40 gross locations are considered to immediately compete for capital, Ring said.

Ring Chairman and CEO Paul McKinney said, “We are pleased to announce the closing of our acquisition of Lime Rock’s CBP assets in the Permian Basin. The majority of these assets are similar to the conventional-focused CBP assets in our core Shafter Lake operations, which will allow us to quickly integrate the assets into our operations. The acquisition further consolidates assets in core counties in the CBP defined by shallow declines, high margin production and undeveloped inventory that immediately competes for capital, and provide for near-term opportunities for field level synergies and cost savings. As in the past, we will continue to execute our value-focused and proven strategy that we believe best positions the company for long-term success”.

In January, Ring began its 2025 development program with one rig drilling horizontal wells followed by another rig drilling vertical wells. The company intends to utilize a phased capital drilling program to “maximize free cash flow and retain the flexibility to respond to changes in commodity prices and other market conditions,” it said in its most recent earnings release.

For 2025, Ring expects total capital spending of $138 million to $170 million that includes a combination of drilling, completing, and placing into production 15 to 22 vertical wells across its asset portfolio.

The full-year capital spending program includes funds for the drilling of targeted well recompletions, capital workovers, infrastructure upgrades, reactivations, leasing costs, ESG improvements, and the drilling of approximately three saltwater disposal wells, Ring said.

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