Ring Energy reduces fourth-quarter capital guidance by 15%

Ring Energy Inc. has reduced its fourth-quarter 2022 capital guidance by 15% while maintaining production guidance.

The Permian basin-focused company now estimates fourth-quarter capital expenditures of $42-46 million, down from the prior estimate of $50-54 million, the company said in a release Oct. 13. Fourth quarter sales volumes are estimated at 18,000-19,000 boe/d (70% oil, 17% natural gas, 13% NGLs) despite the reduction in estimated fourth quarter capital expenditures.

The company plans to complete and place on production the remaining three wells drilled in this year’s third quarter and drill and complete eight to nine new wells, including four horizontal wells (two Northwest Shelf (NWS), two Central Basin Platform (CBP) North), and four to five vertical wells in CBP South. Ring also expects to recomplete eight to twelve wells in CBP South.

An initial outlook for full year 2023 envisions capital expenditure of $150-175 million that includes drilling horizontal wells on legacy assets and drilling vertical wells on recently acquired CBP South assets. Plans are to maintain or slightly grow 2023 full year average sales volumes compared with anticipated fourth-quarter 2022 sales volumes.

In this year’s third quarter, the company drilled eight horizontal wells (five NWS, three CBP) bringing the total number of horizontal wells drilled in 2022 to 23. The company completed and placed on production nine horizontal wells of which four were drilled in the second quarter and five were drilled in the third quarter. Three recompletions were performed on the CBP South acreage recently acquired from privately held Stronghold Energy II Operating LLC and Stronghold Energy II Royalties LP (OGJ Online, July 5, 2022). Six wells were converted with electrical submersible pumps to rod pumps on horizontal wells, including five in NWS and one in legacy CBP acreage (CBP North).